Registration Nos. 2-95546
811-4212
===============================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ X ]
Amendment No. 12 [ X ]
(Check appropriate box or boxes)
FIRST PRAIRIE MONEY MARKET FUND
(Exact Name of Registrant as Specified in Charter)
c/o First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number,
including Area Code: (312) 732-4231
Bradford M. Markham, Esq.
Three First National Plaza
Chicago, Illinois 60670
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
(check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph
(a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new
effective date for a previously filed post-
effective amendment.
Registrant has registered an indefinite number of shares of
its beneficial interests under the Securities Act of 1933
pursuant to Section 24(f) of the Investment Company Act of
1940. Registrant's Rule 24f-2 Notice for the fiscal year
ended December 31, 1994 was filed on or about February 16,
1995.
FIRST PRAIRIE MONEY MARKET FUND
CROSS-REFERENCE SHEET PURSUANT TO RULE 495(A)
<TABLE>
<CAPTION>
Items in
Part A of
Form N-1A Caption Page
<S> <C> <C>
1 Cover Page Cover
2 Synopsis 2
3 Condensed Financial Information 3
4 General Description of Registrant 4, 18
5 Management of the Fund 9
5(a) Management's Discussion of Fund's
Performance *
6 Capital Stock and Other
Securities 18
7 Purchase of Securities Being
Offered 10
8 Redemption or Repurchase 14
9 Pending Legal Proceedings *
- ----------------
<FN> NOTE: Omitted since answer is negative or inapplicable.
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-18
13 Investment Objectives and
Policies B-2
14 Management of the Fund B-5
15 Control Persons and Principal B-7
Holders of Securities
16 Investment Advisory and Other
Services B-7
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation B-18
18 Capital Stock and Other
Securities B-18
19 Purchase, Redemption and Pricing
of Securities Being Offered B-10,
B-12,
B-16
20 Tax Status *
21 Underwriters B-10
22 Calculations of Performance Data B-17
23 Financial Statements B-23
Items in
Part C of
Form N-1A Caption Page
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-4
30 Location of Accounts and Records C-5
31 Management Services C-5
32 Undertakings C-5
_________________________
NOTE: * Omitted since answer is negative or inapplicable.
</TABLE>
<PAGE>
May 1, 1995
FIRST PRAIRIE MONEY MARKET FUND
SUPPLEMENT TO PROSPECTUS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES
ANY CONTRARY INFORMATION CONTAINED IN THE PROSPECTUS.
<TABLE>
ANNUAL FUND OPERATING EXPENSES*
(as a percentage of average daily net assets)
<CAPTION>
Money Market Government
Series Series
<S> <C> <C>
Management Fees . . . . . . . . . . . . . . . . .55% .55%
12b-1 Fees (distribution and
servicing). . . . . . . . . . . . . . . . . . .25% .25%
Other Expenses. . . . . . . . . . . . . . . . . .22% .08%
Total Fund Operating
Expenses. . . . . . . . . . . . . . . . . . . 1.02% .88%
EXAMPLE:
An investor would pay the
following expenses on a
$1,000 investment,
assuming (1) 5% annual
return and (2) redemption
at the end of each time
period:
1 YEAR . . . . . . . . . . . . . . . . . $ 10 $ 9
3 YEARS . . . . . . . . . . . . . . . . . $ 32 $ 28
5 YEARS . . . . . . . . . . . . . . . . . $ 56 $ 49
10 YEARS . . . . . . . . . . . . . . . . . $124 $108
______________________
* The information in the foregoing table does not reflect any fee waivers
or expense reimbursement arrangements that may be in effect.
</TABLE>
CONDENSED FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS. Contained below is per share
operating performance data for a share of Beneficial Interest
outstanding, total investment return, ratios to average net
assets and other supplemental data for the fiscal year ended
December 31, 1994. This information has been derived from the
Fund's financial statements which have been audited by Ernst &
Young LLP, the Fund's independent auditors.
<TABLE>
<CAPTION>
Money Market Government
Series Series
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1.0001 $ .9999
INVESTMENT OPERATIONS:
Investment income net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0355 .0379
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.0109) (.0083)
TOTAL FROM INVESTMENT OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0246 .0296
DISTRIBUTIONS:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from investment income net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.0355) (.0379)
Dividends from net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . (.0002) -
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.0357) (.0379)
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE MANAGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0108 .0080
Net asset value, end of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ .9998 $ .9996
========= ==========
TOTAL INVESTMENT RETURN
RATIOS/SUPPLEMENTAL DATA: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.63%* 3.86%*
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02% .86%
Ratio of net investment income to average net assets. . . . . . . . . . . . . . . . . . . . . . 3.51% 3.73%
Decrease reflected in above expense ratios due to expense reimbursements. . . . . . . . . . . . -- .02%
Net Assets, end of year (000's Omitted) . . . . . . . . . . . . . . . . . . . . . . . . . . . .$119,400 $116,353
- ----------------
<FN> Had the Series not had capital contributions by the Manager during the period, the total
return would have been 2.61% for the Money Market Series and 2.83% for the Government Series.
</TABLE>
MANAGEMENT OF THE FUND
INVESTMENT ADVISER AND ADMINISTRATOR. The Fund's
investment adviser and administrator is First Chicago Investment
Management Company ("FCIMCO"), a newly formed registered,
investment adviser and a wholly-owned subsidiary of The First
National Bank of Chicago ("FNBC"). FCIMCO employs substantially
all the investment personnel who previously provided advisory
services to the Fund.
The Fund has agreed to pay FCIMCO a monthly advisory
fee at the annual rate of .40% of the value of each Series'
average daily net assets, and a monthly administration fee at
the annual rate of .15% of the value of each Series' average
daily net assets. FCIMCO has engaged Concord Holding
Corporation (the "Sub-Administrator") to assist it in providing
certain administrative services for the Fund. FCIMCO, from its
own funds, will pay the Sub-Administrator for the Sub-
Administrator's services.
Prior to January 17, 1995, FNBC served as the Fund's
manager pursuant to a Management Agreement. Under the terms of
the Management Agreement, the Fund agreed to pay FNBC a monthly
management fee at the annual rate of .55 of 1% of the value of
each Series' average daily net assets. For the fiscal year
ended December 31, 1994, the Fund paid FNBC pursuant to the
Management Agreement a monthly fee at the effective annual rate
of .53 of 1% of the value of the Government Series' average
daily net assets, and .55 of 1% of the value of the Money Market
Series' average daily net assets, pursuant to undertakings in
effect.
DISTRIBUTOR. The Fund's distributor is Concord
Financial Group, Inc. Concord Financial Group, Inc., located at
125 West 55th Street, New York, New York 10019, is a wholly-
owned subsidiary of the Sub-Administrator and currently
distributes the shares of other investment companies with
aggregate assets of over $21 billion.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management of the Fund believes that each Series qualified
for the fiscal year ended December 31, 1994 as a regulated
investment company under the Internal Revenue Code of 1986, as
amended.
GENERAL INFORMATION
The Fund's Board and shareholders have approved the
reorganization of each of the Money Market Series and the
Government Series as a separate series of Prairie Funds named
Money Market Fund and U.S. Government Money Market Fund,
respectively. Prairie Funds is a newly-formed registered
investment company. Upon consummation of the transactions,
former Money Market Series and Government Series shareholders
will receive the same number of shares of the Money Market Fund
and U.S. Government Money Market Fund, respectively, as they
owned of their respective Series immediately before the
transactions were consummated. These shares initially will have
the same net asset value as the shares of the Money Market
Series and Government Series, respectively, owned before the
transactions were consummated. The transactions are expected to
be tax free for Federal income tax purposes. After the
transactions are consummated, the Money Market Series and
Government Series will be liquidated and their existence
terminated. Consummation of the transactions is anticipated to
occur in late May, 1995.
<PAGE>
- ---------------------------------------------------------------
FIRST
[LOGO] PRAIRIE
FUNDS
First Prairie
Money Market Fund
MONEY MARKET SERIES AND
GOVERNMENT SERIES PROSPECTUS
The First National Bank of Chicago
MANAGER
Dreyfus Service Corporation
DISTRIBUTOR
Prospectus begins on page one.
[ART]
<PAGE>
FIRST
[LOGO] PRAIRIE
FUNDS
First Prairie
Money Market Fund
MONEY MARKET SERIES AND GOVERNMENT SERIES
- -------------------------------------------------------------
PROSPECTUS
First Prairie Money Market Fund (the "Fund") is an open-end,
diversified, management investment company, known as a money
market mutual fund. Its goal is to provide investors with as
high a level of current income as is consistent with the
preservation of capital and the maintenance of
liquidity.
The Fund permits investors to invest in two separate
portfolios, the Money Market Series and the Government Series.
The Money Market Series invests in short-term money market
instruments consisting of securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, bank
obligations, repurchase agreements, commercial paper
and other corporate obligations. The Government Series invests
only in short-term securities issued or guaranteed as to
principal and interest by the U.S. Government and repurchase
agreements in respect thereof.
Investors can invest, reinvest or redeem shares at any
time without charge or penalty imposed by the Fund.
The First National Bank of Chicago (the "Manager") serves
as the Fund's investment adviser. Dreyfus Service Corporation
(the "Distributor"), a wholly-owned subsidiary of The Dreyfus
Corporation, serves as the Fund's distributor.
The Fund bears certain costs of advertising,
administration and/or distribution pursuant to a plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of
1940.
An investment in the Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance
that the Series will be able to maintain a stable net asset
value of $1.00 per share. The Fund's shares are not deposits or
obligations of, or guaranteed by, the Manager or any of its
affiliates or any bank, and are not insured by the Federal
Deposit Insurance Corporation ("FDIC"), the Federal Reserve
Board or any other agency. The Fund's shares involve certain
investment risks, including the possible loss of principal. The
Fund's yield fluctuates and is not guaranteed.
----------
This Prospectus sets forth concisely information about the Fund
that an investor should know before investing. It should be read
and retained for future reference.
Part B (also known as the Statement of Additional
Information), dated April 11, 1994, which may be revised from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For
a free copy, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call toll free
1-800-346-3621. When telephoning, ask for Operator 666.
- --------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
Table of Contents
Annual Fund Operating Expenses................ 3
Condensed Financial Information............... 4
Highlights.................................... 6
Yield Information............................. 9
Description of the Fund....................... 9
Management of the Fund........................ 21
How to Buy Fund Shares........................ 24
Shareholder Services.......................... 28
How to Redeem Fund Shares..................... 33
Service Plan.................................. 38
Dividends, Distributions and Taxes............ 40
General Information........................... 42
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT
SERIES SERIES
- -------------------------------------------------------------------
<S> <C> <C>
Management Fees .55% .55%
12b-1 Fees (distribution and servicing) .25% .25%
Other Expenses .19% .08%
Total Series Operating Expenses .99% .88%
- ----------------------------------------------------------------
EXAMPLE
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end of each
time period: 1 YEAR $ 10 $ 9
3 YEARS $ 32 $ 28
5 YEARS $ 55 $ 49
10 YEARS $121 $108
</TABLE>
- ----------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE
THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE SERIES' ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
- ---------------------------------------------------------------
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by each
Series, and therefore indirectly by investors, the payment of
which will reduce investors' return on an annual basis.
Long-term investors could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The
information in the foregoing table does not reflect any fee
waiver or expense reimbursement arrangements that may be in
effect. The Manager, affiliates of the Manager and certain
Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Series shares; such
fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Fund Shares" and
"Service Plan."
Condensed Financial
Information
The information in the following tables has been
audited by Ernst & Young, the Fund's independent auditors, whose
report thereon appears in the Statement of Additional
Information. Further financial data and related notes are
included in the Statement of Additional Information, available
upon request.
FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a share of beneficial interest outstanding,
total investment return, ratios to average net assets and other
supplemental data for the Money Market Series for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.
<TABLE>
<CAPTION>
Money Market Series
Year Ended December 31,
- ----------------------------------------------------------------------------
- -
1986(1) 1987 1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $1.0000 $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT
OPERATIONS:
Investment
income--net .0552 .0585 .0679 .0842 .0734 .0543 .0313 .0274
Net realized gain
(loss) on
investments -- (.0001) .0001 -- -- -- -- .0001
------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM
INVESTMENT
OPERATIONS .0552 .0584 .0680 .0842 .0734 .0543 .0313 .0275
------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from
investment
income--net (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274)
Dividends from net
realized gain on
investments -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
TOTAL
DISTRIBUTIONS (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0001
------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT
RETURN 6.26%(2) 6.01% 7.01% 8.75% 7.59% 5.57% 3.18% 2.77%
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets .88%(2) .96% .98% .95% .96% .97% .98% .94%
Ratio of net
investment income
to average net
assets 5.73%(2) 5.82% 6.82% 8.34% 7.33% 5.42% 3.17% 2.73%
Decrease reflected
in above expense
ratios due to
expense
reimbursements .23%(2) .03% .01% -- -- -- -- .05%
Net Assets, end of
year (000's
omitted) $174,024 $128,485 $159,814 $355,260 $414,258 $456,791 $260,865 $162,623
<FN>
- ------------------------
(1) From February 5, 1986 (commencement of operations) to December 31, 1986.
(2) Aominnualized.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a share of beneficial interest outstanding,
total investment return, ratios to average net assets and other
supplemental data for the Government Series for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.
<TABLE>
<CAPTION>
Government Series
Year Ended December 31,
- ----------------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $1.0000 $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net .0409 .0652 .0811 .0715 .0498 .0283 .0249
Net realized gain
(loss)
on investments .0004 -- -- -- -- -- (.0001)
------- ------- ------- ------- ------- ------- -------
TOTAL FROM
INVESTMENT
OPERATIONS .0413 .0652 .0811 .0715 .0498 .0283 .0248
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from
investment
income--net (.0409) (.0652) (.0811) (.0715) (.0498) (.0283) (.0249)
Dividends from net
realized gain on
investments -- (.0003) (.0001) -- -- -- --
------- ------- ------- ------- ------- ------- -------
TOTAL
DISTRIBUTIONS (.0409) (.0655) (.0812) (.0715) (.0498) (.0283) (.0249)
------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000 $ .9999
------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT
RETURN 6.21%(2) 6.75% 8.43% 7.39% 5.10% 2.87% 2.52%
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets .56%(2) .80% .93% .93% .90% .91% .74%
Ratio of net
investment income to
average net assets 6.11%(2) 6.56% 8.05% 7.09% 4.97% 2.87% 2.48%
Decrease reflected in
above expense ratios
due to expense
reimbursements .42%(2) .17% .02% -- -- -- .14%
Net Assets, end of
year (000's omitted) $99,904 $141,348 $272,578 $777,257 $990,897 $548,733 $154,613
<FN>
- ------------------------
(1) From May 1, 1987 (commencement of operations) to December 31, 1987.
(2) Annualized.
</TABLE>
<PAGE>
Highlights
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.
THE FUND The Fund is an open-end, management investment company,
known as a money market mutual fund.
INVESTMENT OBJECTIVE The Fund's goal is to provide investors
with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
THE SERIES The Fund permits investors to invest in two separate
portfolios: the Money Market Series and the Government Series.
MANAGEMENT POLICIES Each Series seeks to maintain a stable net
asset value of $1.00 per share for purchases and redemptions.
There can be no assurance that it will be able to do so.
In accordance with Rule 2a-7 under the Investment Company
Act of 1940, each Series will maintain a dollar-weighted average
portfolio maturity of 90 days or less, and purchase only
instruments with remaining maturities of 13 months or less.
MONEY MARKET SERIES The Money Market Series invests in
short-term money market instruments, including securities issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities, bank obligations, repurchase agreements,
commercial paper and other corporate obligations. During normal
market conditions, at least 25% of the Money Market Series'
assets will be invested in bank obligations.
The Series will purchase only instruments which are rated
in one of the two highest rating categories by at least two
nationally recognized independent rating agencies, or of
comparable quality, in accordance with Rule 2a-7.
GOVERNMENT SERIES The Government Series invests only in
short-term securities issued or guaranteed as to principal and
interest by the U.S. Government, and repurchase agreements in
respect of such securities.
MANAGER AND MANAGEMENT FEE The First National Bank of Chicago
("Manager") is the Fund's investment adviser.
The Fund has agreed to pay the Manager a monthly fee at
the annual rate of .55 of 1% of the value of each Series'
average daily net assets.
SALES CHARGES AND EXPENSES Investors may invest, reinvest or
redeem shares at any time without charge or penalty imposed by
the Fund.
All expenses incurred in the operation of the Fund are
borne by the Fund, including taxes, interest, brokerage fees and
investment advisory fees. Shareholders also bear certain costs
of administration and/or distribution pursuant to a plan adopted
in accordance with Rule 12b-1 under the Investment Company Act
of 1940, as more fully described under "Service Plan."
HOW TO BUY FUND SHARES Orders for the purchase of shares may be
placed through a number of institutions including the Manager,
the Distributor and affiliates of the Manager including First
Chicago Investment Services, Inc., a registered broker-dealer,
and certain other banks, securities dealers and other industry
professionals, such as investment advisers, accountants and
estate planning firms (collectively, "Service Agents").
The minimum initial investment is $1,000 ($250 for IRAs
and other personal retirement plans). All subsequent investments
must be at least $100.
See "How to Buy Fund Shares."
SHAREHOLDER SERVICES The Fund offers its shareholders certain
services and privileges including: Exchange Privilege,
Auto-Exchange Privilege, Automatic Asset Builder, Government
Direct Deposit Privilege, Dividend Sweep Privilege, Automatic
Withdrawal Plan and TeleTransfer Privilege. (Certain services
and privileges may not be available through all Service Agents.)
FREE CHECKWRITING Investors may request on the Account
Application that the Fund provide Redemption Checks drawn on the
Fund's account. Redemption Checks may be made payable to any
person in the amount of $500 or more. There is no charge for
this service.
MONTHLY DIVIDENDS The Fund ordinarily declares dividends from
each Series' net investment income daily. Dividends are usually
paid on the last calendar day of each month, and are
automatically reinvested in additional shares unless the
investor elects payment in cash.
HOW TO REDEEM FUND SHARES Generally, investors should contact
their representatives at the Manager or appropriate Service
Agent for redemption instructions.
Investors who are not clients of the Manager or a Service
Agent may redeem Fund shares by written request, through the
Wire Redemption Privilege, through the Telephone Redemption
Privilege or through the TeleTransfer privilege.
See "How to Redeem Fund Shares."
RISKS AND SPECIAL CONSIDERATIONS Moneys invested in the Fund are
not bank deposits or obligations of, or guaranteed by, the
Manager or any of its affiliates and are not insured by the FDIC
or any other governmental agency.
There can be no assurance the Series will be able to
maintain a stable net asset value of $1.00 per share.
Since the Money Market Series' portfolio may contain
securities issued by foreign banks, the Series may be subject to
additional investment risks that are different from those
incurred by a fund which invests only in U.S. domestic
securities.
See "Descriptions of the Fund--Risk Factors Relating to
the Money Market Series."
Yield Information
From time to time, each Series advertises its yield and
effective yield. Both yield figures are based on historical
earnings and are not intended to indicate future performance. It
can be expected that these yields will fluctuate substantially.
The yield of a Series refers to the income generated by an
investment in such Series over a seven-day period (which period
will be stated in the advertisement). This income is then
annualized. That is, the amount of income generated by the
investment during that week is assumed to be generated each week
over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly, but,
when annualized, the income earned by an investment in the
Series is assumed to be reinvested. The effective yield will be
slightly higher than the yield because of the compounding effect
of this assumed reinvestment. Each Series' yield and effective
yield may reflect absorbed expenses pursuant to any undertaking
that may be in effect. See "Management of the Fund."
"Yield" refers to the Series' income over a 7-day period, which
is then annualized.
"Effective yield" assumes that income is reinvested; it will be
slightly higher than "yield" because of the effect of
compounding reinvested income.
Yield information is useful in reviewing a Series'
performance, but because yields will fluctuate, under certain
conditions such information may not provide a basis for
comparison with domestic bank deposits, other investments
which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of
computing yield.
Yields fluctuate, so this information may not be directly
comparable to bank deposits or other investments which
pay a fixed yield for a stated period of time.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Bank Rate MonitorTM,
N. Palm Beach, Fla. 33408, IBC/Donoghue's Money Fund Report,
Morningstar, Inc. and other industry publications.
Description of the Fund
GENERAL The Fund is a "series fund," which is a mutual fund
divided into separate portfolios. Each portfolio is treated as a
separate entity for certain matters under the Investment Company
Act of 1940 and for other purposes, and a shareholder of one
Series is not deemed to be a shareholder of any other Series. As
described below, for certain matters Fund shareholders vote
together as a group: as to others they vote separately by
Series.
The Fund is a "series fund" currently offering two portfolios
the Money Market Series and the Government Series.
INVESTMENT OBJECTIVE The Fund's goal is to provide investors
with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The
Fund's investment objective cannot be changed without approval
by the holders of a majority (as defined in the Investment
Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective
will be achieved. Securities in which the Series invest may not
earn as high a level of current income as long-term or lower
quality securities which generally have less liquidity,
greater market risk and more fluctuation in market value.
The Fund's goal is to provide as high a level of current income
as is consistent with preservation of capital and maintenance of
liquidity.
MANAGEMENT POLICIES Each Series seeks to maintain a net asset
value of $1.00 per share for purchases and redemptions. To do
so, the Fund uses the amortized cost method of valuing each
Series' securities pursuant to Rule 2a-7 under the Investment
Company Act of 1940, certain requirements of which are
summarized below. There can be no assurance that the Series will
be able to maintain a stable net asset value of $1.00 per share.
Each Series seeks to maintain a net asset value of $1.00 per
share for purchases and redemptions. There can be no assurance
it will be able to do so.
In accordance with Rule 2a-7, each Series will maintain a
dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 13
months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established
by the Board of Trustees to present minimal credit risks and,
with respect to the Money Market Series only, which are rated in
one of the two highest rating categories for debt obligations by
at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument
was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures
established by the Board of Trustees. The nationally recognized
statistical rating organizations currently rating instruments of
the type the Money Market Series may purchase are Moody's
Investors Service, Inc., Standard & Poor's Corporation, Duff &
Phelps, Inc., Fitch Investors Service, Inc., IBCA Limited and
IBCA Inc. and Thomson BankWatch, Inc. and their rating criteria
are described in the Appendix to the Fund's Statement of
Additional Information. This discussion concerning investment
ratings and rating organizations does not apply to the
Government Series because it invests exclusively in securities
issued or guaranteed by the U.S. Government and repurchase
agreements in respect thereof. For further information
regarding the amortized cost method of valuing securities, see
"Determination of Net Asset Value" in the Fund's Statement of
Additional Information.
MONEY MARKET SERIES The Money Market Series invests in
short-term money market obligations, including securities issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time deposits,
bankers' acceptances and other short-term obligations issued by
domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches
of foreign banks, repurchase agreements, and high quality
commercial paper and other short-term corporate obligations,
including those with floating or variable rates of interest. In
addition, the Money Market Series is permitted to lend portfolio
securities and enter into reverse repurchase agreements to the
extent described below. During normal market conditions, at
least 25% of the Money Market Series' assets will be invested
in bank obligations, including obligations of foreign banks and
branches described above.
The Money Market Series invests in
short-term money market obligations.
The Money Market Series will not invest more than 5% of
its total assets in the securities (including the securities
collateralizing a repurchase agreement) of, or subject to puts
issued by, a single issuer, except that (i) the Series may
invest more than 5% of its total assets in a single issuer for a
period of up to three business days in certain limited
circumstances, (ii) the Series may invest in obligations issued
or guaranteed by the U.S. Government without any such
limitation, and (iii) the limitation with respect to puts does
not apply to unconditional puts if no more than 10% of the
Series' total assets is invested in securities issued or
guaranteed by the issuer of the unconditional put. Investments
in rated securities not rated in the highest category by at
least two rating organizations (or one rating organization if
the instrument was rated by only one such organization), and
unrated securities not determined by the Board of Trustees to be
comparable to those rated in the highest category, will be
limited to 5% of the Money Market Series' total assets, with the
investment in any one such issuer being limited to no more than
the greater of 1% of the Series' total assets or $1,000,000. As
to each security, these percentages are measured at the time the
Money Market Series purchases the security.
THE GOVERNMENT SERIES The Government Series invests only in
short-term securities issue or guaranteed as to principal and
interest by the U.S. Government and repurchase agreements in
respect to such securities.
The Government Series invests only in short-term securities
issued or guaranteed by the U.S. Government and repurchase
agreements in respect of such securities.
PORTFOLIO SECURITIES Securities issued or guaranteed by the
U.S. Government include U.S. Treasury securities, which differ
only in their interest rates, maturities and times of issuance.
The Money Market Series and the Government Series may
invest in Treasury Bills, Treasury Notes and Treasury Bonds,
Treasury Bills have initial maturities of one year or less;
Treasury Notes have have initial maturities of one to ten years;
and Treasury Bonds generally have initial maturities of greater
than ten years. The Government Series and the Money Market
Series also may invest in other securities issued or guaranteed
by the U.S. Government, examples of which are Government
National Mortgage Association or Small Business Administration
pass-through certificates and instruments issued by the
United States Maritime Administration. Such securities are
supported by the full faith and credit of the U.S. Treasury.
The Money Market Series and the Government Series may invest in
Treasury Bills, Treasury Notes and Treasury Bonds.
In addition, the Money Market Series may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities. Some of these obligations, such as those of
the Federal Home Loan Banks, are supported by the right of the
issuer to borrow from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and
others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest may fluctuate based on
generally recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored Certificates of deposit are
negotiable certificates evidencing the obligation of a bank to
repay funds deposited with it for a specified period of time.
The Money Market Series also may invest in securities of U.S.
Government agencies and instrumentalities such as FHLB, FNMA
and SLMA. agencies and instrumentalities, no assurance can be
given that it will always do so, since it is not so obligated by
law. The Money Market Series will invest in such securities only
when it is satisfied that the credit risk with respect to the
issuer is minimal.
Time deposits are non-negotiable deposits maintained in
a banking institution for a specified period of time at a stated
interest rate. The Fund will invest in time deposits of banks
that have total assets in excess of one billion dollars. Time
deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the FDIC.
The Money Market Series also invests in various bank deposit
products such as CDs, time deposits and bankers' acceptances.
Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument
upon maturity. The short-term obligations may include uninsured,
direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by a
Series of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and the Series to
resell, the instrument at a fixed price, usually not more than
one week after its purchase. The Fund's custodian or
sub-custodian will have custody of, and will hold in a
segregated account, securities acquired by a Series under a
repurchase agreement. Repurchase agreements are considered by
the staff of the Securities and Exchange Commission to be loans
by the Series which enters into them. In an attempt to reduce
the risk of incurring a loss on a repurchase agreement, the
Government Series will enter into repurchase agreements only
with selected registered or unregistered securities dealers or
banks with total assets in excess of one billion dollars, with
respect to securities of the type in which the Government Series
may invest; and the Money Market Series will enter into
repurchase agreements only with domestic banks with total assets
in excess of one billion dollars or primary government
securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of the type in which the Money
Market Series may invest. Each Series will require that
additional securities be deposited with it if the value of the
securities purchased should decrease below resale price. The
Manager will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred in connection
with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect
to the seller of the securities, realization on the securities
by a Series may be delayed or limited. Each Series will consider
on an ongoing basis the creditworthiness of the institutions
with which it enters into repurchase agreements. Each Series
may only enter into repurchase agreements when the Fund's
custodian or sub-custodian has custody of the underlying
collateral.
Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Money Market Series will
consist only of direct obligations. The other corporate
obligations in which the Money Market Series may invest consist
of high quality, short-term fixed, floating and variable rate
notes and bonds issued by corporations.
The Money Market Series also may purchase floating and
variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any
time, or at specified intervals not exceeding 13 months, in each
case upon not more than 30 days' notice. Variable rate demand
notes include master demand notes which are obligations that
permit the Series to invest fluctuating amounts, which may
change daily without penalty, pursuant to direct arrangements
between the Series, as lender, and the borrower. The interest
rates on these notes fluctuate from time to time. The issuer of
such obligations ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such
obligations. The interest rate on a floating rate demand
obligation is based on a known lending rate, such as a bank's
prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals. Frequently,
such obligations are secured by letters of credit or other
credit support arrangements provided by banks. Because these
obligations are direct lending arrangements between the lender
and the borrower, it is not contemplated that such instrument
generally will be traded, and there generally is no established
secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these
obligations are not secured by letters of credit or other credit
support arrangements, the Money Market Series' right to redeem
is dependent on the ability of the borrower to pay principal and
interest on demand. Such obligations frequently are not rated by
credit rating agencies and the Money Market Series may invest in
obligations which are not so rated only if the Manager
determines at the time of investment that the obligations are of
comparable quality to the other obligations in which the Money
Market Series may invest. The Manager, on behalf of the Money
Market Series, will consider on an ongoing basis the
creditworthiness of the issuers of the floating and variable
rate demand obligations in the Money Market Series' portfolio.
The Money Market Series will not invest more than 10% of the
value of its net assets in floating or variable rate demand
obligations as to which the Series cannot exercise the demand
feature on not more than seven days' notice if there is no
secondary market available for these obligations, and in other
illiquid securities.
The Money Market Series may purchase from financial
institutions participation interests in securities in which such
Series may invest. A participation interest gives the Money
Market Series an undivided interest in the security in the
proportion that the Money Market Series' participation interest
bears to the total principal amount of the security. These
instruments may have fixed, floating or variable rates of
interest, with remaining maturities of 13 months or less. If the
participation interest is unrated, or has been given a rating
below that which is permissible for purchase by the Money Market
Series, the participation interest will be backed by an
irrevocable letter of credit or guarantee by a bank that the
Board of Trustees has determined meets the prescribed quality
standards for banks set forth below, or the payment obligation
otherwise will be collateralized by U.S. Government securities,
or, in the case of unrated participation interests, the Manager
must have determined that the instrument is of comparable
quality to those instruments in which the Money Market Series
may invest. For certain participation interests, the Money
Market Series will have the right to demand payment, on not more
than seven days' notice, for all or any part of the Money Market
Series' participation interest in the security, plus accrued
interest. As to these instruments, the Money Market Series
intends to exercise its right to demand payment only upon a
default under the terms of the security, as needed to provide
liquidity to meet redemptions, or to maintain or improve the
quality of its investment portfolio. The Money Market Series
will not invest more than 10% of its net assets in participation
interests that do not have this demand feature, and in other
illiquid securities.
The Money Market Series may invest up to 10% of the
value of its net assets in securities as to which a liquid
trading market does not exist, provided such investments are
consistent with such Series' investment objective. Such
securities may include securities that are not readily
marketable, such as certain securities that are subject to legal
or contractual restrictions on resale and repurchase agreements
providing for settlement in more than seven days after notice.
As to these securities, the Money Market Series is subject to a
risk that should the Series desire to sell them when a ready
buyer is not available at a price that the Fund deems
representative of their value, the value of the Money Market
Series' net assets could be adversely affected. However, if a
substantial market of qualified institutional buyers develops
pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain of these securities held by the Money
Market Series, such Series intends to treat such securities as
liquid securities in accordance with procedures approved by the
Fund's Board of Trustees. Because it is not possible to predict
with assurance how the market for restricted securities pursuant
to Rule 144A will develop, the Fund's Board of Trustees has
directed the Manager to monitor carefully the Money Market
Series' investments in such securities with particular regard to
trading activity, availability of reliable price information and
other relevant information. To the extent that for a period of
time qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Money Market Series'
investing in such securities may have the effect of increasing
the level of illiquidity in such Series' portfolio during such
period.
The Money Market Series may borrow for temporary or
emergency purposes and for investment purposes, on a secured
basis through entering into reverse repurchase agreements with
banks, brokers or dealers. Reverse repurchase agreements involve
the transfer by the Money Market Series of an underlying debt
instrument in return for cash proceeds based on a percentage of
the value of the security. The Money Market Series retains the
right to receive interest and principal payments on the
security. The Money Market Series will use the proceeds of
reverse repurchase agreements only to make investments which
generally either mature or have a demand feature to resell to
the issuer at a date simultaneous with or prior to the
expiration of the reverse repurchase agreement. At an agreed
upon future date, the Money Market Series repurchases the
security, at principal, plus accrued interest. In certain types
of agreements, there is no agreed upon repurchase date and
interest payments are calculated daily, often based on the
prevailing overnight repurchase rate. The Money Market Series
will maintain in a segregated custodial account cash, cash
equivalents, U.S. Government securities or other high quality
liquid debt securities equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in
certain cases, in accordance with releases promulgated by the
Securities and Exchange Commission. The Securities and Exchange
Commission views reverse repurchase agreement transactions as
collateralized borrowings, and, pursuant to the Investment
Company Act of 1940, the Money Market Series must maintain
continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of
the amount borrowed. If the 300% asset coverage with respect to
the Money Market Series should decline as a result of market
fluctuations or other reasons, such Series may be required to
sell some of its portfolio holdings within three days to reduce
the debt and restore 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities
at that time. As a result of these transactions, the Money
Market Series is exposed to greater potential fluctuations in
the value of its assets and its net asset value per share.
Interest costs on the money borrowed may exceed the return
received on the securities purchased. The Fund's Trustees have
considered the risks to the Money Market Series and its
shareholders which may result from the entry into reverse
repurchase agreements and have determined that the entry into
such agreements is consistent with the Money Market Series'
investment objective and management policies.
From time to time, the Money Market Series may lend
securities from its portfolio to brokers, dealers and other
financial institutions needing to borrow securities to complete
certain transactions. Such loans may not exceed 33 1/3% of the
value of the Money Market Series' total assets. In connection
with such loans, the Money Market Series will receive collateral
consisting of cash, U.S. Government securities or irrevocable
letters of credit. Such collateral will be maintained at all
times in an amount equal to at least 100% of the current market
value of the loaned securities. The Money Market Series can
increase its income through the investment of such collateral.
The Money Market Series continues to be entitled to the payments
in amounts equal to the interest or other distributions payable
on the loaned security and receives interest on the amount of
the loan. Such loans will be terminable at any time upon
specified notice. The Money Market Series might experience risk
of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with such
Series. The Money Market Series will limit the entities with
which it will enter into securities lending transactions to
those whose securities are eligible for purchase by the Money
Market Series.
CERTAIN FUNDAMENTAL POLICIES The Money Market Series: (i) may
borrow money, to the extent permitted under the Investment
Company Act of 1940; (ii) may invest up to 5% of its total
assets in the obligations of any single issuer, except that up
to 25% of the value of its total assets may be invested (subject
to the provisions of Rule 2a-7), and obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased, without regard to any such
limitation; and (iii) will invest, under normal market
conditions, at least 25% of its total assets in securities
issued by banks, including foreign banks and branches, and may
invest up to 25% of its total assets in the securities of
issuers in any other industry, provided that there is no
limitation on investments in obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. The
Government Series may: (i) borrow money from banks (other than
the Manager or its affiliates), but only for temporary or
emergency (not leveraging) purposes, in an amount up to 10% of
the value of such Series' total assets (including the amount
borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Government
Series' total assets, such Series will not make any additional
investments: and (ii) pledge, hypothecate, mortgage or otherwise
encumber its assets, but only in an amount up to 10% of the
value of its total assets to secure borrowings for temporary or
emergency purposes. This paragraph describes fundamental
policies that cannot be changed, as to either Series, without
approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the outstanding voting shares
of such Series. See "Investment Objective and Management
Policies--Investment Restrictions" in the Statement of
Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES OF THE MONEY MARKET
SERIES The Money Market Series may (i) pledge, hypothecate,
mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 10% of its net
assets in repurchase agreements providing for settlement in more
than seven days after notice and in other illiquid securities
(which securities could include participation interests that are
not subject to the demand feature described above and floating
and variable rate demand obligations as to which the Money
Market Series cannot exercise the related demand feature
described above and as to which there is no secondary market).
See "Investment Objective and Management Policies--Investment
Restrictions" in the Statement of Additional Information.
RISK FACTORS RELATING TO THE MONEY MARKET SERIES Since the Money
Market Series' portfolio may contain securities issued by
foreign branches of domestic banks, foreign subsidiaries of
domestic banks, and domestic and foreign branches of foreign
banks, the Money Market Series may be subject to additional
investment risks with respect to such securities that are
different in some respects from those incurred by a fund which
invests only in debt obligations of U.S. domestic issuers,
although such obligations may be higher yielding when compared
to the securities of U.S. domestic issuers. Such risks include
possible future political and economic developments, the
possible imposition of foreign withholding taxes on interest
income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of
principal and interest on these securities and the possible
seizure or nationalization of foreign deposits.
OTHER INVESTMENT CONSIDERATIONS Each Series attempts to increase
yields by trading to take advantage of short-term market
variations. This policy is expected to result in high portfolio
turnover but should not adversely affect the Series since they
usually do not pay brokerage commissions when they purchase
short-term debt obligations. The value of the portfolio
securities held by the Series will vary inversely to changes in
prevailing interest rates. Thus, if interest rates have
increased from the time a security was purchased, such security,
if sold, might be sold at a price less than its purchase cost.
Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at
a price greater than its purchase cost. In either instance, if
the security was purchased at face value and held to maturity,
no gain or loss would be realized.
Investment decisions for each Series are made
independently from those of other investment companies,
investment advisory accounts, custodial accounts, individual
trust accounts and commingled funds that may be advised by the
Manager. However, if such other investment companies or managed
accounts are prepared to invest in, or desire to dispose of,
securities of the type in which a Series invests at the same
time as such Series, available investments or opportunities for
sales will be allocated equitably to each of them. In some
cases, this procedure may adversely affect the size of the
position obtained for or disposed of by a Series or the price
paid or received by a Series.
Management of the Fund
MANAGER The Manager, located at Three First National Plaza,
Chicago, Illinois 60670, is the Fund's investment adviser. The
Manager, a wholly-owned subsidiary of First Chicago Corporation,
a registered bank holding company, is a commercial bank offering
a wide range of banking and investment services to customers
throughout the United States and around the world. As of
December 31, 1993, it was one of the largest commercial banks in
the United States and the largest in the mid-Western United
States in terms of assets ($52.5 billion) and in terms of
deposits ($28.1 billion). As of December 31, 1993, the Manager
provided personal investment management services to portfolios
containing approximately $11.8 billion in assets. The Manager
serves as investment adviser for the Fund pursuant to a
Management Agreement dated April 30, 1993. Prior thereto, the
Manager provided investment advisory services to the Fund
pursuant to an Investment Advisory Agreement (the "Prior
Advisory Agreement"). Under the Management Agreement, the
Manager, subject to the supervision of the Fund's Board of
Trustees and in conformity with Massachusetts law and the stated
policies of the Fund, manages the investment of the assets of
each Series. The Manager is responsible for making investment
decisions for the Fund, placing purchase and sale orders and
providing research, statistical analysis and continuous
supervision of the investment portfolio. The Manager provides
these services through its Investment Management Department. The
investment advisory services of the Manager are not exclusive
under the terms of the Management Agreement. The Manager is free
to, and does, render investment advisory services to others,
including other investment companies as well as commingled trust
funds and a broad spectrum of individual trust and investment
management portfolios, which have varying investment objectives.
The Manager has advised the Fund that in making its investment
decisions the Manager does not obtain or use material inside
information in the possession of any other division or
department of the Manager or in the possession of any affiliate
of the Manager.
The investment adviser, The First National Bank of Chicago, is
one of the largest commercial banks in the United States and
the largest in the mid-Western United States and manages $11.8
billion of investment assets.
The Manager and its affiliates presently intend to
continue to charge and collect customary account and account
transaction fees with respect to accounts through which or for
which shares of a Series are purchased or redeemed. This will
result in the receipt by the Manager and its affiliates of
customer account fees in addition to management and Service
Agent fees from the Fund with respect to assets in certain
accounts. See "Service Plan."
The Manager has engaged The Dreyfus Corporation
("Dreyfus"), located at 200 Park Avenue, New York, New York
10166, to assist it in providing certain administrative services
for the Fund pursuant to a Master Administration Agreement
between the Manager and Dreyfus effective April 30, 1993. Prior
thereto, Dreyfus provided administrative services to the Fund
pursuant to an Administration Agreement with the Fund (the
"Prior Administration Agreement"). Dreyfus was formed in 1947
and, as of February 28, 1994, managed or administered
approximately $77 billion in assets for more than 1.9 million
investor accounts nationwide. The Dreyfus Corporation, which
manages or administers approximately $77 billion in mutual fund
assets, will assist the Manager in providing certain
administrative services for the Fund.
Under the terms of the Prior Advisory Agreement and
Prior Administration Agreement, which were terminated on April
30, 1993, the Fund agreed to pay the Manager and Dreyfus monthly
fees at the annual rate of .40 and .20, respectively, of 1% of
the value of each Series' average daily net assets. Under the
terms of the Management Agreement, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .55
of 1% of the value of each Series' average daily net assets,
which is .05 of 1% less than the combined fees payable by the
Fund to the Manager and Dreyfus under the Prior Advisory
Agreement and Prior Administration Agreement. Pursuant to its
agreement with Dreyfus, the Manager, from its own funds, will
pay Dreyfus for Dreyfus' services. For the fiscal year ended
December 31, 1993, the Fund paid the Manager pursuant to the
Management Agreement and Prior Advisory Agreement a monthly fee
at the effective aggregate annual rate of .37 of 1% of the value
of the Government Series' average daily net assets and .45 of 1%
of the value of the Money Market Series' average daily net
assets, pursuant to undertakings in effect. For the period
January 1, 1993 to April 29, 1993, the Fund paid Dreyfus
pursuant to the Prior Administration Agreement a monthly
administration fee at the effective annual rate of .14 of 1% of
the value of the Government Series' average daily net asets and
.16 of 1% of the value of the Money Market Series' average daily
net assets pursuant to undertakings in effect.
GLASS-STEAGALL ACT The Glass-Steagall Act and other applicable
laws prohibit Federally chartered or supervised banks from
engaging in certain aspects of the business of issuing,
underwriting, selling and/or distributing securities, although
banks such as the Manager are permitted to purchase and sell
securities upon the order and for the account of their
customers. The Manager has advised the Fund of its belief that
it may perform the services for the Fund contemplated by the
Management Agreement and this Prospectus without violating the
Glass-Steagall Act or other applicable banking laws or
regulations. The Manager has pointed out, however, that there
are no cases deciding whether a bank such as the Manager may
perform services comparable to those to be performed by the
Manager and that future changes in either Federal or state
statutes and regulations relating to permissible activities of
banks and their subsidiaries and affiliates, as well as future
judicial or administrative decisions or interpretations of
present and future statutes and regulations, could prevent the
Manager from continuing to perform such services for the Fund.
If the Manager were to be prevented from providing such services
to the Fund, the Fund's Board of Trustees would review the
Fund's relationship with the Manager and consider taking all
actions necessary in the circumstances.
For a discussion of the Glass-Steagall Act in connection
with the Fund's Service Plan, see "Service Plan."
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN The
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 110 Washington Street,
New York, New York 10286, is the Fund's Custodian. The
Shareholder Services Group, Inc. is the Fund's transfer agent.
EXPENSES All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Manager. The expenses borne by the Fund include the
following: taxes, interest, brokerage fees and commissions, if
any, fees of Trustees who are not officers, directors, employees
or holders, directly or indirectly, of 5% or more of the
outstanding voting securities of the Manager or Dreyfus.
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings and any
extraordinary expenses. Expenses attributable to a particular
Series are charged against the assets of that Series; other
expenses of the Fund are allocated between the Series on the
basis determined by the Board of Trustees, including, but not
limited to, proportionately in relation to the net assets of
each Series.
In addition, each Series bears certain costs of
distributing Fund shares in accordance with a plan (the "Service
Plan") adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940. See "Annual Fund Operating Expenses" and
"Service Plan".
The imposition of the management fee, as well as other
operating expenses, including the fees paid under the Service
Plan, will have the effect of reducing the yield to investors.
How to Buy Fund Shares
INFORMATION APPLICABLE TO ALL PURCHASERS The Fund's distributor
is Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, located at 200 Park Avenue, New York, New York 10166.
The shares it distributes are not deposits or obligations of The
Dreyfus Security Savings Bank, F.S.B. or the Manager and
therefore are not insured by the FDIC. The Fund offers a number
of convenient ways to purchase shares.
Shares may be purchased by all clients of the Manager
and its affiliates, including qualified custody, agency and
trust accounts, through their accounts with the Manager and its
affiliates, or by clients of certain Service Agents through
their accounts with the Service Agent. Shares also may be
purchased directly through the Distributor. Share certificates
will not be issued. The Fund reserves the right to reject any
pruchase order. You can open an account with as little as
$1,000 ($250 for IRAs or other retirement plans). Subsequent
investments can be as little as $100.
The minimum initial investment is $1,000. However, for
IRAs and other personal retirement plans, the minimum initial
purchase is $250. All subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's
Account Application. The Manager and Service Agents may
impose initial or subsequent investment minimums which are
higher or lower than those specified above and may impose
different minimums for different types of accounts or purchase
arrangements.
Shares of each Series are sold on a continuous basis at
the net asset value per share next determined after an order in
proper form and Federal Funds (moneys of member banks within the
Federal Reserve System which are held on deposit at a Federal
Reserve Bank) are received by the Transfer Agent. If an investor
does not remit Federal Funds, his payment must be converted into
Federal Funds. This usually occurs within one business day of
receipt of a bank wire and within two business days of receipt
of a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into
Federal Funds. Prior to receipt of Federal Funds, the investor's
money will not be invested.
Each Series' net asset value per share is determined as
of 12:00 Noon, New York time, on each day the New York Stock
Exchange is open for business, except on Martin Luther King, Jr.
Day, Columbus Day and Veterans Day. Net asset value per share is
computed by dividing the value of each Series' net assets (i.e.,
the value of its assets less liabilities) by the total number of
its shares outstanding. See "Determination of Net Asset Value"
in the Fund's Statement of Additional Information.
Federal regulations require that an investor provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN
to the Fund could subject an investor to a $50 penalty imposed
by the Internal Revenue Service (the "IRS").
PURCHASING SHARES THROUGH ACCOUNTS WITH THE MANAGER OR A SERVICE
AGENT Investors who desire to purchase shares through their
accounts at the Manager or its affiliates or a Service Agent
should contact such entity directly for appropriate
instructions, as well as for information about conditions
pertaining to the account and any related fees. Service Agents
and the Manager may charge clients direct fees for effecting
transactions in shares, as well as fees for other services
provided to clients in connection with accounts through which
shares are purchased. These fees, if any, would be in addition
to fees received by a Service Agent under the Service Plan or
management fees received by the Manager under the Management
Agreement. Each Service Agent has agreed to transmit to its
clients a schedule of such fees. In addition, Service Agents and
the Manager may impose minimum account and other conditions,
including conditions which might affect the availability of
certain shareholder privileges described in this Prospectus.
Certain investor accounts with the Manager and its affiliates
and certain Service Agents may be eligible for an automatic
investment privilege, commonly called a "sweep," under which
amounts in excess of a certain minimum held in these accounts
will be invested automatically in shares at predetermined
intervals. Each investor desiring to use this privilege should
consult the Manager or his Service Agent for details. It is the
responsibility of the Manager and Service Agents to transmit
client orders on a timely basis.
Copies of the Fund's Prospectus and Statement of
Additional Information may be obtained from the Distributor, the
Manager, certain affiliates of the Manager or certain Service
Agents, as well as from the Fund.
PURCHASING SHARES THROUGH THE DISTRIBUTOR Shares also may be
purchased directly through the Distributor by check or wire, or
through the TeleTransfer Privilege described below. The initial
investment must be accompanied by the Fund's Account Application
which can be obtained from the Distributor and certain Service
Agents. Checks should be made payable to "The First Prairie
Family of Funds." Payments to open new accounts which are mailed
should be sent to The First Prairie Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with the
investor's Account Application indicating the name of the Series
being purchased. For subsequent investments, the investor's Fund
account number should appear on the check and an investment slip
should be enclosed and sent to The First Prairie Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither
initial nor subsequent investments should be made by third party
check. A charge will be imposed if any check used for investment
in an investor's account does not clear. All payments should be
in U.S. dollars and, to avoid fees and delays, should be drawn
only on U.S. banks.
Wire payments may be made if the investor's bank account
is in a commercial bank that is a member of the Federal Reserve
System or any other bank having a correspondent bank in New York
City or Chicago. Immediately available funds may be transmitted
by wire to The Bank of New York, DDA#8900052066/First Prairie
Money Market Fund--Money Market Series or DDA#8900052244/First
Prairie Money Market Fund--Government Series, as the case may
be, for purchase of Fund shares in the investor's name. The wire
must include the name of the Series being purchased, the
investor's account number (for new accounts, the investor's TIN
should be included instead), account registration and dealer
number, if applicable. If the investor's initial purchase of
Fund shares is by wire, the investor should call 1-800-645-6561
after completing his wire payment to obtain a Fund account
number. An investor must include his Fund account number on the
Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. Further information
about remitting funds in this manner is provided in "Payment and
Mailing Instructions" on the Fund's Account Application.
Subsequent investments also may be made by electronic transfer
of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House
member. The investor must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit the
investor's Fund account. The instructions must specify the
investor's Fund account registration and the investor's Fund
account number preceded by the digits "1111." TELETRANSFER
PRIVILEGE Investors may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if they have checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents
and the investor's Fund Call 1-800-227-0072 for TeleTransfer
transactions account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or
terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is
contemplated.
Investors who have selected the TeleTransfer Privilege
may request a TeleTransfer purchase of Fund shares by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.
Shareholder Services
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some
Service Agents may impose certain conditions on their clients
which are different from those described in this Prospectus.
Each investor should consult his Service Agent in this regard.
EXCHANGE PRIVILEGE The Exchange Privilege enables an investor to
purchase, in exchange for shares of a Series, shares of the
other Series or shares of certain other funds advised by the
Manager or shares of certain funds advised by Dreyfus, to the
extent such shares are offered for sale in the investor's state
of residence. These funds have different investment objectives
that may be of interest to investors. The Exchange Privilege may
be expanded to permit exchanges between a Series and other funds
that, in the future, may be advised by the Manager. Investors
will be notified of any such change. If an investor desires to
use this Privilege, he should consult his Service Agent or the
Distributor to determine if it is available and whether any
conditions are imposed on its use. You can exchange your shares
for shares of other eligible First Prairie funds.
To use this Privilege, an investor or his Service
Agent acting on his behalf must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. If an
investor previously has established the Telephone Exchange
Privilege, the investor may telephone exchange instructions by
calling 1-800-227-0072 or, if calling from overseas,
1-401-455-3309. See "How to Redeem Fund Shares-- Procedures."
Before any exchange, an investor must obtain and should review a
copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained from the
Distributor, the Manager, certain affiliates of the Manager or
certain Service Agents. The shares being exchanged must have a
current value of at least $500; furthermore, when establishing a
new account by exchange, the shares being exchanged must have a
value of at least the minimum initial investment required for
the fund into which the exchange is being made. Telephone
exchanges may be made only if the appropriate "YES" box has been
checked on the Account Application, or a separate signed and
signature-guaranteed Shareholder Services Form is on file with
the Transfer Agent. Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and
where available, will be automatically carried over to the fund
in which the exchange is made: Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TeleTransfer Privilege and the dividend/
capital gain distribution option (except for the Dividend Sweep
Privilege) selected by the investor.
Shares will be exchanged at the next determined net
asset value; however, a sales load may be charged with respect
to exchanges into funds sold with a sales load. If an investor
is exchanging into a fund that charges a sales load, the
investor may qualify for share prices which do not include the
sales load or which reflect a reduced sales load, if the shares
of the Series from which the investor is exchanging were: (a)
purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to
the foregoing categories of shares. To qualify, at the time of
an exchange, the investor must notify the Transfer Agent or the
investor's Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of the investor's
holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the
right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The
Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund or Series for shares
of another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain
or loss.
AUTO-EXCHANGE PRIVILEGE The Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly,
quarterly or annual basis), in exchange for shares of a Series,
in shares of the other Series, certain other funds in the First
Prairie Family of Funds or certain funds advised by Dreyfus of
which he is currently an investor. The amount an investor
designates, which can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month
according to the exchange schedule that the investor has
selected. Shares will be exchanged at the then-current net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. The investor or the investor's
Service Agent may modify or cancel this Privilege at any time by
writing to The First Prairie Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. The exchange of shares of one fund or Series
for shares of another is treated for Federal income tax purposes
as a sale of the shares given in exchange by the shareholder
and, therefore, an exchanging shareholder may realize a taxable
gain or loss. For more information concerning this Privilege and
the funds eligible to participate in this Privilege, or to
obtain an Auto-Exchange Authorization Form, please call toll
free in Illinois 1-800-621-6592, or, outside Illinois
1-800-537-4938 if Fund shares were purchased through First
Chicago Investment Services, Inc. or 1-800-645-6561 if Fund
shares were purchased through the Distributor. You can exchange
Fund shares automatically at regular intervals which you
select.
AUTOMATIC ASSET BUILDER Automatic Asset Builder permits an
investor to purchase shares of a Series (minimum of $100 and
maximum of $150,000 per transaction) at regular intervals
selected by the investor. Shares are purchased by transferring
funds from the bank account designated by an investor. At the
investor's option, the bank account designated by the investor
will be debited in the specified amount, and shares will be You
can purchase shares automatically at regular intervals which
you select.
purchased, once a month, on either the first or fifteenth day,
or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. To establish an Automatic
Asset Builder account, the investor must file an authorization
form with the Transfer Agent. The necessary authorization form
may be obtained from the Distributor, the Manager, certain
affiliates of the Manager or certain Service Agents. An investor
may cancel his participation in this Privilege or change the
amount of purchase at any time by mailing written notification
to The First Prairie Family of Funds, P.O. Box 9671, Providence,
Rhode Island 02940-9671, and the notification will be effective
three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE Government Direct Deposit
Privilege enables an investor to purchase shares (minimum of
$100 and maximum of $50,000 per transaction) by having Federal
salary, Social Security or certain veterans', military or other
payments from the Federal government automatically deposited
into the investor's Fund account. An investor may deposit as
much of such payments as he elects. To enroll in Government
Direct Deposit, the investor must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment
that the investor desires to include in this Privilege. The
appropriate form may be obtained from the Distributor, the
Manager, certain affiliates of the Manager or certain Service
Agents. Death or legal incapacity will terminate an investor's
participation in this Privilege. An investor may elect at any
time to terminate his participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate an
investor's participation upon 30 days' notice to the investor.
Many Federal payments are eligible for full or partial direct
deposit into your account to purchase shares that charges a
sales load, the investor may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If an investor is investing in a fund that
charges a contingent deferred sales charge, the shares purchased
will be subject to the contingent deferred sales charge, if any,
applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information.
DIVIDEND OPTIONS The Dividend Sweep enables an investor to
invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Series in shares of another
fund or series in the First Prairie Family of Funds or certain
other funds advised or administered by the Dreyfus of which the
investor is a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a
fund sold with a sales load. If an investor is investing in a
fund You can "sweep" your dividends and capital gain
distributions into certain other First Prairie funds.
Dividend ACH permits a shareholder to transfer
electronically on the payment date their dividends or dividends
and capital gains, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be
so designated. Banks may charge a fee for this service. For more
information concerning these privileges, or to request a
Dividend Options Authorization Form, investors should call toll
free in Illinois 1-800-621-6592, or, outside Illinois,
1-800-537-4938 if Fund shares were purchased through First
Chicago Investment Services, Inc., or 1-800-645-6561 if Fund
shares were purchased through the Distributor. To cancel these
privileges, the investor or the investor's Service Agent must
mail written notification to The First Prairie Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment
in or cancellation of these privileges is effective three
business days following receipt by the Transfer Agent. These
privileges are available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do
not apply for Dividend Sweep. The Fund may modify or terminate
these privileges at any time or charge a service fee. No such
fee currently is contemplated. Shares held under Keogh Plans,
IRAs or other retirement plans are not eligible for these
privileges.
AUTOMATIC WITHDRAWAL PLAN The Automatic Withdrawal Plan permits
an investor to request withdrawal of a specified dollar amount
(minimum of $50) on either a monthly or quarterly basis if the
investor has a $5,000 minimum account. An application for the
Automatic Withdrawal Plan can be obtained from the Distributor,
the Manager, certain affiliates of the Manager or certain
Service Agents. The Automatic Withdrawal Plan may be ended at
any time by the investor, the Fund or the Transfer Agent. You
can withdraw a specified dollar amount from your account every
month or quarter.
How to Redeem Fund Shares
GENERAL An investor may request redemption of his shares at any
time. Redemption requests should be transmitted to the Transfer
Agent as described below. When a request is received in proper
form, the Fund will redeem the shares at the next determined net
asset value. You can redeem Fund shares at any time.
The Fund imposes no charges when shares are redeemed.
Service Agents may charge a nominal fee for effecting
redemptions of Fund shares. The value of the shares redeemed may
be more or less than their original cost, depending upon the
Series' then-current net asset value. As described in
"Determination of Net Asset Value" in the Statement of
Additional Information, each Series seeks to maintain a net
asset value of $1.00 per share for purchases and redemptions.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent
of a redemption request in proper form, except as provided by
the rules of the Securities and Exchange Commission. HOWEVER, IF
AN INVESTOR HAS PURCHASED FUND SHARES BY CHECK, BY TELETRANSFER
PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY
SUBMITS A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO THE INVESTOR PROMPTLY UPON BANK CLEARANCE OF THE
INVESTOR'S PURCHASE CHECK, TELETRANSFER PURCHASE OR AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE
TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS
AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF THE INVESTOR'S SHARES WERE PURCHASED BY WIRE
PAYMENT, OR IF THE INVESTOR OTHERWISE HAS A SUFFICIENT COLLECTED
BALANCE IN HIS ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO
THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES
WILL ACCRUE AND BE PAYABLE, AND THE INVESTOR WILL BE ENTITLED
TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund
shares will not be redeemed until the Transfer Agent has
received the investor's Account Application.
The Fund reserves the right to redeem an investor's
account at the Fund's option upon not less than 30 days' written
notice if the account's net asset value is $500 or less and
remains so during the notice period.
PROCEDURES An investor who has purchased shares through his
account at the Manager or a Service Agent must redeem shares by
following instructions pertaining to such account. If an
investor has given his Service Agent authority to instruct the
Transfer Agent to redeem shares and to credit the proceeds of
such redemptions to a designated account at the Service Agent,
the investor may redeem shares only in this manner and in
accordance with a written redemption request pursuant to the
regular redemption procedure described below. Investors who wish
to use the other redemption methods described below must arrange
with their Service Agents for delivery of the required
application(s) to the Transfer Agent. It is the responsibility
of the Manager or the Service Agent, as the case may be, to
transmit the redemption order and credit the investor's account
with the redemption proceeds on a timely basis. Investors are
urged to consult their Service Agents for instructions
concerning redemption of Fund shares held in IRAs or other
personal retirement accounts. Other investors may redeem shares
by using the regular redemption procedure through the Transfer
Agent, using the Check Redemption Privilege, through the Wire
Redemption Privilege, through the Telephone Redemption
Privilege, or through the TeleTransfer Privilege, as described
below. The Fund offers a number of convenient ways to access
your investment.
An investor may redeem or exchange shares by telephone
if the investor has checked the appropriate box on the Fund's
Account Application or has filed a Shareholder Services Form
with the Transfer Agent. By selecting a telephone redemption or
exchange privilege, an investor authorizes the Transfer Agent to
act on telephone instructions from any person representing
himself or herself to be the investor, or a representative of
the investor's Service Agent, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer
Agent to employ reasonable procedures, such as requiring a form
of identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Fund or the Transfer
Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent
will be liable for following telephone instructions reasonably
believed to be genuine.
During times of drastic economic or market conditions,
an investor may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of shares
of a Series. In such cases, investors should consider using the
other redemption procedures described herein. Use of these other
redemption procedures may result in the investor's redemption
request being processed at a later time than it would have been
if telephone redemption had been used.
REGULAR REDEMPTION Under the regular redemption procedure, an
investor may redeem shares by written request, indicating the
Series from which shares are to be redeemed, mailed to The First
Prairie Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. Redemption requests must be signed by the individual
shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees
in proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and
savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. For more information with respect
to signature-guarantees, please call the telephone number shown
on the front cover. Redemption proceeds of at least $1,000 will
be wired to any member bank of the Federal Reserve System in
accordance with a written signature-guaranteed request. Shares
may be redeemed by written request.
CHECK REDEMPTION PRIVILEGE An investor may request on the
Account Application, Shareholder Services Form or by later
written request to the Fund that the Fund provide Redemption
Checks drawn on the Fund's account. Redemption Checks may be
made payable to the order of any person in the amount of $500 or
more. Redemption Checks should not be used to close an account.
Redemption Checks are free, but the Transfer You can write
checks of $500 or more using a special checkbook provided by
the Fund, if you request it on your Account Application.
Agent will impose a fee for stopping payment of a Redemption
Check at the investor's request or if the Transfer Agent cannot
honor the Redemption Check due to insufficient funds or other
valid reason. An investor should date his Redemption Checks with
the current date when the investor writes them. Investors should
not postdate Redemption Checks. If an investor does, the
Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks
which are dated within six months of presentment for payment, if
they are otherwise in good order. This Privilege may be modified
or terminated at any time by the Fund or the Transfer Agent upon
notice to shareholders.
WIRE REDEMPTION PRIVILEGE An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
his account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if the investor's bank is not a
member. To establish the Wire Redemption Privilege, an investor
must check the appropriate box and supply the necessary
information on the Fund's Account Application or file a
Shareholder Services Form with the Transfer Agent. An investor
may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to
the investor's address. Redemption proceeds of less than $1,000
will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of
only up to $250,000 wired within any 30-day period. An investor
may telephone redemption requests by calling 1-800-227-0072 or,
if calling from overseas, 1-401-455-3309. The Fund reserves the
right to refuse any redemption request, including requests made
shortly after a change of address, and may limit the amount
involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the
Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire.
Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for this Privilege. You can redeem shares by
wire if you check the appropriate box on your Account
Application.
TELEPHONE REDEMPTION PRIVILEGE An investor may redeem Fund
shares (maximum $150,000 per day) by telephone if he has checked
the appropriate box on the Fund's Account Application or has
filed a Shareholder Services Form with the Transfer Agent. The
redemption proceeds will be paid by check and mailed to the
investor's address. An investor may telephone redemption
instructions by calling 1-800-227-0072 or, if calling from
overseas, 1-401-455-3309. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly
after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or
the Fund. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for this Privilege.
TELETRANSFER PRIVILEGE An investor may redeem Fund shares
(minimum $500 per day) by telephone if he has checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or has filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between the investor's Fund account and the bank account
designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Redemption
proceeds will be on deposit in the investor's account at an
Automated Clearing House member bank ordinarily two days after
receipt of the redemption request or, at the investor's request,
paid by check (maximum $150,000 per day) and mailed to his
address. Holders of jointly registered Fund or bank accounts may
redeem through the TeleTransfer Privilege for transfer to their
bank account only up to $250,000 within any 30-day period. The
Fund reserves the right to refuse any request made by telephone,
including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests.
The Fund may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee is
currently contemplated. Call 1-800-227-0072 for TeleTransfer
transactions.
Investors who have selected the TeleTransfer Privilege
may request a TeleTransfer redemption of Fund shares by
telephoning 1-800-227-0072 or, if calling from overseas,
1-401-455-3309. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for this Privilege.
Service Plan
Under the Service Plan, adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, each Series bears the
costs and expenses in connection with advertising and marketing
its shares and pays the fees of certain Service Agents for
Servicing, as defined below, at a rate not exceeding .25 of 1%
per annum of the value of each Series' average daily net assets.
Service Agents receive fees based upon the average daily value
of the Series' shares owned by shareholders for which the
Service Agent is the dealer or holder of record or for which the
Service Agent has a servicing relationship. The Service Plan
provides that the Manager, Dreyfus and the Distributor may act
as Service Agents and receive fees under the Service Plan. From
time to time, the Manager, Dreyfus and/or the Distributor may
waive as to either or both Series receipt of fees under the
Service Plan while retaining the ability to be paid by the Fund
under the Service Plan thereafter. The fees payable to the
Manager, Dreyfus and/or the Distributor for Servicing are
payable without regard to actual expenses incurred. The Fund
has adopted a plan so that it can pay for advertising and
marketing and compensate others for providing services to you.
Each Series also bears the costs of preparing and printing
prospectuses and statements of additional information used for
regulatory purposes and for distribution to existing
shareholders. Under the Service Plan, each Series bears (a) the
costs of preparing, printing and distributing prospectuses and
statements of additional information used for other purposes and
(b) the costs associated with implementing and operating the
Service Plan (such as costs of printing and mailing service
agreements), the aggregate of such amounts not to exceed in any
fiscal year of the Fund the greater of $100,000 or .005 of 1% of
the value of such Series average daily net assets for such
fiscal year. Each item for which a payment may be made under the
Service Plan may constitute an expense of distributing Fund
shares as the Securities and Exchange Commission construes such
term under Rule 12b-1.
Expenses under the Service Plan may be carried forward
from one year to another to the extent they remain unpaid. All
or part of any such amount will be paid at such time, if ever,
as the Board of Trustees determines to pay it. The Series will
not be charged for interest, carrying or other finance charges
on any unreimbursed distribution or other expense incurred and
not paid in a prior year.
Servicing may include, among other things, one or more
of the following: answering client inquiries regarding the Fund;
assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records;
processing purchase and redemption transactions; investing
client cash account balances automatically in shares of a
Series; providing periodic statements showing a client's account
balance and integrating such statements with those of other
transactions and balances in the client's other accounts
serviced by the Service Agent; arranging for bank wires; and
such other services as the Fund may request, to the extent the
Service Agent is permitted by applicable statute, rule or
regulation.
The Glass-Steagall Act and other applicable laws
prohibit Federally chartered or supervised banks from engaging
in certain aspects of the business of issuing, underwriting,
selling and/or distributing securities. Accordingly, banks will
be engaged to act as Service Agents only to perform
administrative and shareholder servicing functions. While the
matter is not free from doubt, the Fund's Board of Trustees
believes that such laws should not preclude a bank from acting
as a Service Agent. However, judicial or administrative
decisions or interpretations of such laws, as well as changes in
either Federal or state statutes or regulations relating to the
permissible activities of banks or their subsidiaries or
affiliates, could prevent a bank from continuing to perform all
or a part of its Servicing activities. If a bank were prohibited
from so acting, its shareholder clients would be permitted to
remain Fund shareholders and alternative means for continuing
the Servicing of such shareholders would be sought. In such
event, changes in the operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to
avail themselves of any automatic investment or other services
then being provided by such bank. The Fund does not expect that
shareholders would suffer any adverse financial consequences as
a result of any of these occurrences.
Dividends, Distributions
and Taxes
The Fund ordinarily declares dividends from each Series' net
investment income on each day the New York Stock Exchange is
open for business, except on Martin Luther King, Jr. Day,
Columbus Day and Veterans Day. Dividends usually are paid on the
last calendar day of each month, and are automatically
reinvested in additional shares of the Series from which they
were paid unless the investor elects payment in cash, or the
investor's customer arrangement with the Manager or a Service
Agent provides for payment in cash. Shares of each Series begin
earning income dividends on the day the purchase order is
effective. Each Series' earnings for Saturdays, Sundays and
holidays are declared as dividends on the preceding business
day. If an investor redeems all shares in his account at any
time during the month, all dividends to which the investor is
entitled are paid along with the proceeds of the redemption.
Distributions from net realized securities gains, if any,
generally are declared and paid once a year by each Series, but
each Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), in all events in
a manner consistent with the provisions of the Investment
Company Act of 1940. The Fund will not make distributions from
net realized securities gains unless capital loss carryovers, if
any, have been utilized or have expired. Investors may choose
whether to receive distributions in cash or to reinvest in
additional shares of the Series from which distributions were
paid at net asset value. All expenses are accrued daily and
deducted before declaration of dividends to investors. Each
Series declares dividends from net investment income on each
business day. Dividends are usually paid on the last day of
each month.
Dividends derived from net investment income, together
with distributions from any net realized short-term securities
gains, all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by a
Series will be taxable to U.S. investors as ordinary income,
whether received in cash or reinvested in shares of the Series.
No dividend paid by a Series will qualify for the dividends
received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains, if
any, of a Series will be taxable to U.S. investors as long-term
capital Dividends and distributions will be taxable to U.S.
investors as ordinary income gains regardless of how long
investors have held such Series' shares and whether such
distributions are received in cash or reinvested in shares of
the Series. The Code provides that the net capital gains of an
individual generally will not be subject to Federal income tax
at a rate in excess of 28%. Dividends and distributions may be
subject to certain state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bounds, paid by the Fund
to a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign
investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities
gains paid by the Fund to a foreign investor generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of an investor's dividends
and distributions will be mailed to such investor annually. Each
investor also will receive periodic summaries of his account
which will include information as to dividends and distributions
from securities gains, if any, paid during the year. The Fund
intends to provide shareholders with a statement which sets
forth the percentage of dividends and distributions paid by a
Series that is attributable to interest income from direct
obligations of the United States.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
taxable dividends, distributions from net realized securities
gains of the Fund paid to a shareholder if such shareholder
fails to certify either that the TIN furnished in connection
with opening an account is correct or that such shareholder has
not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable
dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup
withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report
taxable dividend and interest income on a Federal income tax
return. If you have not furnished us with a correct Taxpayer
Identification Number, you may be subject to tax withholding of
31% of all taxable dividends and distributions. The Money
Market Series also may invest in securities of U.S. Government
agencies and instrumentalities such as FHLB, FNMA and SLMA.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that each Series has
qualified for the fiscal year ended December 31, 1993 as a
"regulated investment company" under the Code. The Fund intends
to continue to have each series so qualify if such qualification
is in the best interests of its shareholders. Such qualification
relieves the Series of any liability for Federal income tax to
the extent its earnings are distributed in accordance with
applicable provisions of the Code. The Fund is subject to a
non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital
gains.
Each investor should consult his tax adviser regarding
specific questions as to Federal, state or local taxes.
General Information
The Fund was organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to
an Agreement and Declaration of Trust (the "Trust Agreement")
dated October 8, 1985. The Money Market Series commenced
operations on February 5, 1986 and the Government Series on May
1, 1987. The Fund is authorized to issue an unlimited number of
shares of beneficial interest, par value $.01 per share. Each
share has one vote.
In February, 1993, the shareholders of the Money
Market Series and in March, 1993, the shareholders of the
Government Series voted to approve the Management Agreement
between the Fund and the Manager and terminate the Prior
Advisory Agreement and the Prior Administration Agreement. In
addition, shareholders of the Money Market Series voted to
change certain of such Series' fundamental policies and
investment restrictions, among other things, to (i) increase the
amount such Series may borrow to the extent permitted under the
Investment Company Act of 1940, (ii) increase the amount of such
Series' assets which it may pledge to the extent necessary to
secure such borrowings and make such policy non-fundamental,
(iii) permit such Series to invest up to 10% of the value of its
net assets in illiquid securities and make such policy
non-fundamental and (iv) permit such Series to lend its
portfolio securities in an amount not to exceed 33 1/3% of the
value of its total assets.
To date, the Trustees have authorized the creation of
two series of shares. All consideration received by the Fund for
shares of one of the Series and all assets in which such
consideration is invested will belong to that Series (subject
only to the rights of creditors of the Fund) and will be subject
to the liabilities related thereto. The income attributable to,
and the expenses of, one Series will be treated separately from
those of the other Series. The Fund has the ability to create,
from time to time, new series without shareholder approval.
Rule 18f-2 under the Investment Company Act of 1940 provides
that any matter required to be submitted under the provisions of
the Investment Company Act of 1940 or applicable state law or
otherwise to the holders of the outstanding voting securities of
an investment company, such as the Fund, will not be deemed to
have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each Series affected
by such matter. Rule 18f-2 further provides that a Series shall
be deemed to be affected by a matter unless it is clear that the
interests of such Series in the matter are identical or that the
matter does not affect any interest of such Series. However, the
Rule exempts the selection of independent accountants and the
election of trustees from the separate voting requirements of
the Rule.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Fund. However, the Trust Agreement disclaims
shareholder liability for acts or obligations of the Fund and
requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by
the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and
expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be
unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by
the Fund, the shareholder paying such liability will be entitled
to reimbursement from the general assets of the Fund. The
Trustees intend to conduct the operations of the Fund in such a
way so as to avoid, as far as possible, ultimate liability of
the shareholders for liabilities of the Fund. As discussed under
"Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder
meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose
of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's
ownership and sends confirmations and statements of account.
Investor inquiries may be made to the investor's Service
Agent, including the Manager, or by writing to the Fund at the
address shown on the front cover or by calling the appropriate
telephone number.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
<PAGE>
FIRST PRAIRIE MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
This Statement of Additional Information, which is not
a prospectus, supplements and should be read in conjunction with
the current Prospectus of Prairie Money Market Fund (the
"Fund"), dated May 1, 1995, as it may be revised from time to
time. To obtain a copy of the Fund's Prospectus, please write
to the Fund at Three First National Plaza, Chicago, Illinois
60670, or call toll free 1-800-346-3621.
First Chicago Investment Management Company ("FCIMCO"
or the "Manager") serves as the Fund's investment adviser and
administrator.
Concord Financial Group, Inc. (the "Distributor") is
the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . B-6
Management Arrangements . . . . . . . . . . . . . . . . . B-9
Purchase of Fund Shares . . . . . . . . . . . . . . . . . B-12
Service Plan. . . . . . . . . . . . . . . . . . . . . . . B-13
Redemption of Fund Shares . . . . . . . . . . . . . . . . B-14
Determination of Net Asset Value. . . . . . . . . . . . . B-15
Dividends, Distributions and Taxes. . . . . . . . . . . . B-16
Yield Information . . . . . . . . . . . . . . . . . . . . B-16
Portfolio Transactions. . . . . . . . . . . . . . . . . . B-17
Information About the Fund. . . . . . . . . . . . . . . . B-17
Counsel and Independent Auditors. . . . . . . . . . . . . B-18
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . B-19
Financial Statements. . . . . . . . . . . . . . . . . . . B-22
Report of Independent Auditors. . . . . . . . . . . . . . B-33
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be
read in conjunction with the section in the Fund's Prospectus
entitled "Description of the Fund."
Portfolio Securities
Bank Obligations. Domestic commercial banks organized
under Federal law are supervised and examined by the Comptroller
of the Currency and are required to be members of the Federal
Reserve System and to have their deposits insured by the Federal
Deposit Insurance Corporation (the "FDIC"). Domestic banks
organized under state law are supervised and examined by state
banking authorities but are members of the Federal Reserve
System only if they elect to join. In addition, state banks
whose certificates of deposit ("CDs") may be purchased by the
Money Market Series are insured by the Bank Insurance Fund
administered by the FDIC (although such insurance may not be of
material benefit to the Money Market Series, depending on the
principal amount of the CDs of each bank held by the Money
Market Series) and are subject to Federal examination and to a
substantial body of Federal law and regulation. As a result of
Federal or state laws and regulations, domestic branches of
domestic banks whose CDs may be purchased by the Money Market
Series, among other things, generally are required to maintain
specified levels of reserves, are limited in the amounts which
they can loan to a single borrower and are subject to other
regulations designed to promote financial soundness. However,
not all of such laws and regulations apply to foreign branches
of domestic banks.
Obligations of foreign branches of domestic banks,
foreign subsidiaries of domestic banks and domestic and foreign
branches of foreign banks, such as CDs and time deposits
("TDs"), may be general obligations of the parent banks in
addition to the issuing branches, or may be limited by the terms
of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of
domestic banks. These risks include foreign economic and
political developments, foreign governmental restrictions that
may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. Foreign branches and
subsidiaries are not necessarily subject to the same or similar
regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements.
In addition, less information may be publicly available about a
foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.
Obligations of United States branches of foreign banks
may be general obligations of the parent banks in addition to
the issuing branches, or may be limited by the terms of a
specific obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve
requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed
in that state.
In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from
time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a
specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State
Branches generally must be insured by the FDIC if such branches
take deposits of less than $100,000.
In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Manager carefully evaluates such investments on a
case-by-case basis.
The Money Market Series may purchase CDs issued by
banks, savings and loan associations and similar thrift
institutions with less than $1 billion in assets, the deposits
of which are insured by the FDIC, provided the Money Market
Series purchases any such CD in a principal amount of not more
than $100,000, which amount would be fully insured by the Bank
Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC. Interest payments on such a CD are
not insured by the FDIC. The Money Market Series will not own
more than one such CD per such issuer.
Lending Portfolio Securities. To a limited extent, the
Money Market Series may lend its portfolio securities to
brokers, dealers and other financial institutions, provided it
receives cash collateral which at all times is maintained in an
amount equal to at least 100% of the current market value of the
securities loaned. By lending its portfolio securities, the
Money Market Series can increase its income through the
investment of the cash collateral. For purposes of this policy,
the Money Market Series considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by such
Series to be the equivalent of cash. Such loans may not exceed
33-1/3% of the value of the Money Market Series' total assets.
From time to time, the Money Market Series may return to the
borrower or a third party which is unaffiliated with the Fund,
and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Money Market Series
must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the
market value of the securities rises above the level of such
collateral; (3) the Money Market Series must be able to
terminate the loan at any time; (4) the Money Market Series must
receive reasonable interest on the loan, as well as any interest
or other distributions payable on the loaned securities, and any
increase in market value; and (5) the Money Market Series may
pay only reasonable custodian fees in connection with the loan.
These conditions may be subject to future modification.
Investment Restrictions
Money Market Series. The Money Market Series has
adopted investment restrictions numbered 1 through 8 as
fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "Act")) of such
Series' outstanding voting shares. Investment restrictions
numbered 9 through 14 are not fundamental policies and may be
changed by a vote of a majority of the Trustees at any time.
The Money Market Series may not:
1. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25% of the
value of the Money Market Series' total assets may be invested
(subject to the provisions of Rule 2a-7 under the Act) without
regard to such limitation.
2. Invest less than 25% of its assets in securities
issued by banks, including foreign banks and branches, or invest
more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on
the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Notwithstanding
the foregoing, for temporary defensive purposes the Money Market
Series may invest less than 25% of its assets in bank
obligations.
3. Borrow money, except to the extent permitted under
the Act (which currently limits borrowing to no more than
33-1/3% of the value of the Series' total assets).
4. Purchase or sell real estate, commodities or
commodities contracts, or oil and gas interests.
5. Underwrite the securities of other issuers, except
to the extent the Money Market Series may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
6. Make loans to others except through the purchase of
debt obligations or the entry into repurchase agreements;
however, the Money Market Series may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value of
its total assets. Any loans of portfolio securities will be
made according to guidelines established by the Securities and
Exchange Commission and the Fund's Board of Trustees.
7. Issue any senior security (as such term is defined
in Section 18(f) of the Act), except to the extent that the
activities permitted in Investment Restriction Nos. 3 and 12 may
be deemed to give rise to a senior security.
8. Sell securities short or purchase securities on
margin.
9. Write or purchase put or call options or
combinations thereof.
10. Purchase common stocks, preferred stocks, warrants
or other equity securities, or purchase corporate bonds (except
as set forth in the Prospectus) or debentures, state bonds,
municipal bonds or industrial revenue bonds.
11. Invest in securities of other investment companies,
except to the extent permitted under the Act.
12. Pledge, hypothecate, mortgage or otherwise encumber
its assets, except to the extent necessary to secure permitted
borrowings and to the extent related to the deposit of assets in
escrow in connection with the purchase of securities on a when-
issued or delayed-delivery basis.
13. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could include
participation interests that are not subject to the demand
feature described in the Fund's Prospectus), if, in the
aggregate, more than 10% of its net assets would be so invested.
14. Invest in companies for the purpose of exercising
control.
Government Series. The Government Series has adopted
the following restrictions as fundamental policies. These
restrictions cannot be changed without approval by the holders
of a majority (as defined in the Act) of such Series'
outstanding voting shares.
The Government Series may not:
1. Purchase common stocks, preferred stocks, warrants
or other equity securities, or purchase corporate bonds (except
as set forth in the Prospectus) or debentures, state bonds,
municipal bonds or industrial revenue bonds.
2. Borrow money except from banks (other than the
Manager or its affiliates) for temporary or emergency (not
leveraging) purposes in an amount up to 10% of the value of the
Government Series' total assets (including the amount borrowed)
based on the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the value of the Government
Series' total assets, such Series will not make any additional
investments.
3. Pledge, hypothecate, mortgage or otherwise encumber
its assets, except in an amount up to 10% of the value of its
total assets, but only to secure borrowings for temporary or
emergency purposes.
4. Sell securities short or purchase securities on
margin.
5. Write or purchase put or call options or
combinations thereof.
6. Underwrite the securities of other issuers or
purchase securities subject to restrictions on disposition under
the Securities Act of 1933 (so called "restricted securities").
The Government Series may not enter into repurchase agreements
providing for settlement in more than seven days after notice or
purchase securities which are not readily marketable (which
securities could include participation interests that are not
subject to the demand feature described in the Prospectus), if,
in the aggregate, more than 10% of its net assets would be so
invested. The Government Series may not invest in time deposits
maturing in more than seven days and time deposits maturing from
two business days through seven calendar days may not exceed 10%
of such Series' total assets.
7. Purchase or sell real estate, real estate
investment trust securities, commodities or commodities
contracts, or oil and gas interests.
8. Make loans to others except through the purchase of
debt obligations referred to in the Fund's Prospectus.
9. Invest in companies for the purpose of exercising
control.
10. Purchase securities of any investment companies,
except (a) purchases limited to a maximum of (i) 3% of the total
voting stock of any one investment company and (ii) 5% of the
Government Series' net assets with respect to any one investment
company or (b) those received as part of a merger, consolidation
or acquisition of substantially all of the assets or
reorganization of another investment company.
While not a fundamental policy, the Fund will not
invest in oil, gas and other mineral leases, or real estate
limited partnerships.
If a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage
resulting from a change in values or assets will not constitute
a violation of that restriction.
The Fund may make commitments on behalf of a Series
more restrictive than the restrictions listed above so as to
permit the sale of Series shares in certain states. Should the
Fund determine that a commitment is no longer in the best
interests of the Series and its shareholders, the Fund reserves
the right to revoke the commitment by terminating the sale of
such Series' shares in the state involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with
information as to their principal business occupations during at
least the last five years, are shown below.
Trustees of the Fund
JOHN P. GOULD, Trustee. Distinguished Service Professor of
Economics of the University of Chicago Graduate School
of Business. From 1983 to 1993, Dean of the University
of Chicago Graduate School of Business. Dean Gould
also serves as a Director of Harpor Capital Advisors.
Mr. Gould is also a Board member of five other funds in
the Prairie Family of Funds. He is 55 years old and
his address is 1101 East 58th Street, Chicago, Illinois
60637.
MARILYN McCOY, Trustee. Vice President of Administration and
Planning of Northwestern University. From 1981 to
1985, she was a Director of Planning and Policy
Development for the University of Colorado. She also
serves on the Board of Directors of Evanston Hospital,
the Chicago Metropolitan YMCA, the Chicago Network and
United Charities. Mrs. McCoy is a member of the
Chicago Economics Club. Mrs. McCoy is also a Board
member of five other funds in the Prairie Family of
Funds. She is 46 years old and her address is
1100 North Lake Shore Drive, Chicago, Illinois 60611.
RAYMOND D. ODDI, Trustee. Private Consultant. A Director of
Caremark International, Inc. and Medisense, Inc.,
companies in the health care industry and Baxter Credit
Union. From 1978 to 1986, Senior Vice President of
Baxter International, Inc., a company engaged in the
production of medical care products. He also is a
member of the Illinois Society of Certified Public
Accountants. Mr. Oddi is also a Board member of five
other funds in the Prairie Family of
Funds. He is 66 years old and his address is 1181 Loch
Lane, Lake Forest, Illinois 60045.
Trustees were elected at the meeting of shareholders
held on September 28, 1987. No further shareholder meetings
will be held for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding
office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for
the election of Trustees. Under the Act, shareholders of record
of not less than two-thirds of the outstanding shares of the
Fund may remove a Trustee through a declaration in writing or by
vote cast in person or by proxy at a meeting called for that
purpose. Under the Fund's Agreement and Declaration of Trust,
the Trustees are required to call a meeting of shareholders for
the purpose of voting upon the question of removal of any such
Trustee when requested in writing to do so by the shareholders
of record of not less than 10% of the Fund's outstanding shares.
For so long as the plan described in the section
captioned "Service Plan" remains in effect, the Trustees of the
Fund who are not "interested persons" of the Fund, as defined in
the 1940 Act, will be selected and nominated by the Trustees who
are not "interested persons" of the Fund.
Officers of the Fund
JOSEPH F. KISSEL, President. Executive Vice President of
Concord Holding Corporation, the Fund's
sub-administrator
(the "Sub-Administrator"), and an officer of other
investment companies administered by the
Sub-Administrator.
His address is 125 West 55th Street, New York, New York
10019. He is 47 years old.
ANN E. BERGIN, Vice President. Senior Vice President of the
Sub-Administrator and an officer of other investment
companies administered by the Sub-Administrator. Her
address is 125 West 55th Street, New York, New York
10019. She is 35 years old.
STEPHEN A. SMITH, Vice President. Senior Vice President of the
Distributor and an officer of other investment
companies distributed by the Distributor. His address
is 125 West 55th Street, New York, New York 10019. He
is 41 years old.
RICHARD A. FABIETTI, Treasurer. Senior Vice President and
Treasurer of the Sub-Administrator and the Distributor
and an officer of other investment companies
administered by the Sub-Administrator. His address is
125 West 55th Street, New York, New York 10019. He is
36 years old.
MARTIN G. FLANIGAN, Assistant Treasurer. Mutual Funds
Accounting Manager of the Sub-Administrator and an
officer of other investment companies administered by
the Sub-Administrator. His address is 125 West 55th
Street, New York, New York 10019. He is 31 years
old.
DOMENICK PUGLIESE, Secretary. Vice President and Counsel--
Mutual Funds of the Sub-Administrator and Distributor,
since November 1994, and an officer of other investment
companies administered by the Sub-Administrator. He
was Vice President and Associate General Counsel of
Prudential Mutual Funds, from July 1992 to November
1994, and of Prudential Securities, from March 1992 to
July 1992. For
more than five years prior thereto, he was an associate
with the law firm of Battle Fowler. His address is 125
West 55th Street, New York, New York 10019. He is 33
years old.
LINDA MAHON, Assistant Secretary. Vice President of the Sub-
Administrator and Distributor, since January 1994, and
an officer of other investment companies administered
by the Sub-Administrator. From 1991 to 1994, she was
Corporate Secretary of J.&W. Seligman & Co.
Incorporated. From 1989 to 1991, she was Vice
President of Paribas Asset Management, Inc. Her
address is 125 West 55th Street, New
York, New York 10019. She is 40 years old.
The Fund pays its Trustees its allocable share of the
aggregate of a fixed fee of $25,000 per annum and a per meeting
fee of $1,000 for all funds in the Prairie Family of Funds. The
estimated aggregate amount of compensation payable to each
Trustee by the Fund and all other funds in the Prairie Family of
Funds for which such person is a Board member for the fiscal
year ending December 31, 1995 are as follows:
<TABLE>
(3) (5)
(2) Pension or Total Compensation
(1) Aggregate Retirement (4) From Fund and
Name of Board Compensation from Benefits Accrued Estimated Annual Fund Complex Paid
Member Fund* as Part of Fund's Benefits Upon to Board Member
Expenses Retirement
<S> <C> <C> <C> <C>
John P. Gould $8,000 None None $30,000
Marilyn McCoy $8,000 None None $30,000
Raymond D. Oddi $8,000 None None $30,000
______________________________
* Amount does not include reimbursed expenses for attending Board meetings, which are estimated to be approximately $745
for all Trustees as a group.
</TABLE>
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read
in conjunction with the section in the Prospectus entitled
"Management of the Fund."
Investment Advisory Agreement. FCIMCO provides investment
advisory services pursuant to the Investment Advisory Agreement
(the "Agreement") dated January 17, 1995, with the Fund. As to
each Series, the Agreement is subject to annual approval by (i)
the Funds's Board of Trustees or (ii) vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities
of such Series, provided that in either event the continuance
also is approved by a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Fund
or FCIMCO, by vote cast in person at a meeting called for the
purpose of voting on such approval. As to each Series, the
Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board of Trustees or by vote of the holders of a
majority of such Series' shares, or, on not less than 90 days'
notice, by FCIMCO. The Agreement will terminate automatically,
as to the relevant Series, in the event of its assignment (as
defined in the 1940 Act).
FCIMCO is responsible for investment decisions for each
Series in accordance with the stated policies of such Series,
subject to the approval of the Fund's Board of Trustees. All
purchases and sales are reported for the Trustees' review at
the meeting subsequent to such transactions.
The following persons are officers and/or directors of
FCIMCO: J. Stephen Baine, Chairman of the Board of Directors,
Chief Executive Officer and President; Alan F. Delp, William G.
Jurgensen, Joseph M. Thomas and David J. Vitale, Directors;
Terrall J. Janeway, Treasurer, Chief Financial and Accounting
Officer and Managing Director; Bradford M. Markham, Secretary
and Chief Legal Officer; and Richard A. Davies, Deborah L.
Edwards, Marco Hanig, David R. Kling and Stephen P. Manus,
Managing Directors.
Administration and Sub-Administration Agreements.
Pursuant to an Administration Agreement dated January 17, 1995,
with the Fund, FCIMCO assists in all aspects of the Trust's
operations, other than providing investment advice, subject to
the overall authority of the Fund's Board in accordance with
Massachusetts law. FCIMCO has engaged Concord Holding
Corporation (the "Sub-Administrator") to assist it in providing
certain administrative services to the Fund. Pursuant to its
agreement with FCIMCO (the "Sub-Administration Agreement"), the
Sub-Administrator assists FCIMCO in furnishing the Fund
clerical help and accounting, data processing, bookkeeping,
internal auditing and legal services and certain other services
required by the Fund, preparing reports to the Series'
shareholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities, calculating the net asset value of each Series'
shares and generally in providing for all aspects of the Fund's
operation, other than providing investment advice. The fees
payable to the Sub-Administrator for its services are paid by
FCIMCO.
The Fund has agreed that FCIMCO and the Sub-Administrator
will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the
matters to which respective agreements relate, except for a
loss resulting from wilful misfeasance, bad faith or gross
negligence on the part of FCIMCO in the performance of its
obligations or from reckless disregard by it of its obligations
and duties under its Agreements or on the part of the Sub-
Administrator in the performance of its obligations or from
reckless disregard by it of its obligations and duties under
its agreement.
Expenses and Expense Information. As compensation for the
Manager's services to the Fund, the Fund has agreed to pay the
Manager an investment advisory and administration fee, computed
daily and paid monthly, at an annual rate of .40 and .15,
respectively, of 1% of the value of each Series' average daily
net assets. Prior to January 17, 1995, The First National Bank
of Chicago ("FNBC") provided management services to the Fund
pursuant to a Management Agreement (the "Prior Agreement") with
the Fund and engaged The Dreyfus Corporation ("Dreyfus") to
provide administration services to the Fund. Pursuant to the
Prior Agreement, the Fund agreed to pay FNBC a fee at the
annual rate of .55 of 1% of the value of each Series' average
daily net assets. Prior to April 30, 1993, FNBC provided
investment advisory services to the Fund pursuant to an
Investment Advisory Agreement (the "Prior Advisory Agreement")
with the Fund and Dreyfus provided administration services to
the Fund pursuant to an Administration Agreement (the "Prior
Administration Agreement") with the Fund. Pursuant to the
Prior Advisory Agreement, the Fund agreed to pay FNBC an
advisory fee at the annual rate of .40 of 1% of the value of
each Series' average daily net assets. Pursuant to the Prior
Administration Agreement, the Fund agreed to pay Dreyfus an
administration fee at the annual rate of .20 of 1% of the value
of each Series' average daily net assets.
The fees paid to FNBC pursuant to the Prior Advisory
Agreement with respect to the Money Market Series for the
fiscal year ended December 31, 1992 was $1,565,674. For the
period January 1, 1993 through April 29, 1993, the fee payable
to FNBC pursuant to the Prior Advisory Agreement was $345,615.
For the period from April 30, 1993 (effective date of the Prior
Agreement) to the fiscal year ended December 31, 1993 and for
the fiscal year ended December 31, 1994, the fees payable to
FNBC were $649,937 and $859,905, respectively. For the fiscal
year ended December 31, 1993, the fee payable to FNBC was
reduced by $70,345, pursuant to an undertaking in effect
resulting in net fees paid of $925,207.
The fees paid to FNBC pursuant to the Prior Advisory
Agreement with respect to the Government Series for the fiscal
year ended December 31, 1992 was $2,661,832. For the period
January 1, 1993 through April 29, 1993, the fee payable to FNBC
pursuant to the Prior Advisory Agreement was $730,686. For the
period from April 30, 1993 (effective date of the Prior
Agreement) to the fiscal year ended December 31, 1993 and for
the fiscal year ended December 31, 1994 the fees payable to
FNBC were $1,635,057 and $692,452, respectively. For the
fiscal years ended December 31, 1993 and 1994, the fees payable
to FNBC were reduced by $567,879 and $29,785, respectively,
pursuant to an undertaking in effect resulting in net fees paid
of $1,797,864 in fiscal 1993 and $662,667 in fiscal 1994.
The fee paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Money Market
Series for the fiscal year ended December 31, 1992 was
$782,837. For the period January 1, 1993 through April 29,
1993, the fee payable to Dreyfus pursuant to the Prior
Administration Agreement was $172,808; however, pursuant to an
undertaking in effect, Dreyfus reduced its fee by $32,272,
resulting in a net fee of $140,536.
The fee paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Government Series
for the fiscal year ended December 31, 1992 was $1,330,916.
For the period January 1, 1993 through April 29, 1993, the fee
payable to Dreyfus pursuant to the Prior Administration
Agreement was $365,343; however, pursuant to an undertaking in
effect, Dreyfus reduced its fee by $103,746, resulting in a net
fee of $261,597.
All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Manager. The expenses borne by the Fund include the
following: taxes, interest, brokerage fees and commissions, if
any, fees of Trustees, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's
existence, costs of independent pricing services, costs
attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, and any extraordinary
expenses. The Fund bears certain advertising, marketing and
Servicing expenses in accordance with the Fund's Service Plan
and also bears costs of preparing, printing and distributing
certain prospectuses and statements of additional information
and costs associated with implementing and operating such plan.
Expenses attributed to a particular Series are charged against
the assets of that Series; other expenses of the Fund are
allocated between the Series on the basis determined by the
Board of Trustees, including, but not limited to,
proportionately in relation to the net assets of each Series.
See "Service Plan."
The Manager has agreed that, as to each Series, if in any
fiscal year the aggregate expenses of a Series (including
management fees, but excluding taxes, brokerage, interest on
borrowings and, with the prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed
the expense limitation of any state having jurisdiction over
such Series, the Series may deduct from the fees to be paid to
the Manager, or the Manager will bear, such excess expense, to
the extent required by state law. Such deduction or payment,
if any, will be estimated daily and reconciled and effected or
paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Series' net assets
increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's
distributor pursuant to an agreement which is renewable
annually. The Distributor also acts as distributor for the
other funds in the Prairie Family of Funds.
Using Federal Funds. The Shareholder Services Group, Inc.,
the Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), or the Fund may attempt to notify the investor upon
receipt of checks drawn on banks that are not members of the
Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer
of a securities dealer, bank or other financial institution and
his order to purchase Fund shares is paid for other than in
Federal Funds, the securities dealer, bank or other financial
institution, acting on behalf of its customer, will complete
the conversion into, or itself advance, Federal Funds generally
on the business day following receipt of the customer order.
The order is effective only when so converted and received by
the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with sufficient Federal Funds or cash
balance in his brokerage account with a securities dealer, bank
or other financial institution will become effective on the day
that the order, including Federal Funds, is received by the
Transfer Agent.
SERVICE PLAN
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "Service Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the Act provides, among other things,
that an investment company may bear expenses of distributing
its shares only pursuant to a plan adopted in accordance with
the Rule. Because some or all of the fees paid for advertising
or marketing the Fund's shares and the fees paid to certain
financial institutions (which may include banks), securities
dealers and other financial industry professionals
(collectively, "Service Agents") could be deemed to be payment
of distribution expenses, the Fund's Board of Trustees has
adopted such a plan (the "Plan"). The Fund's Board of Trustees
believes that there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders. In some states,
banks or other financial institutions effecting transactions in
Fund shares may be required to register as dealers pursuant to
state law.
A quarterly report of the amounts expended under the Plan
and the purposes for which such expenditures were incurred,
must be made to the Board of Trustees for its review. In
addition, the Plan provides that it may not be amended to
increase materially the costs which a Series may bear for
distribution pursuant to the Plan without shareholder approval
and that other material amendments of the Plan must be approved
by the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of the Plan or in the related service agreements, by vote of
the Trustees cast in person at a meeting called for the purpose
of considering such amendments. As to each Series, the Plan
and the related service agreements are subject to annual
approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Plan. The Plan
was so approved by the Board of Trustees at a meeting held on
December 2, 1994. The Plan may be terminated, as to each
Series, at any time by vote of a majority of the Trustees who
are not "interested persons" and have no direct or indirect
financial interest in the operation of the Plan or in any of
the related service agreements or by vote of a majority of such
Series' shares. As to each Series, any service agreement may
be terminated without penalty, at any time, by such vote of the
Trustees or, upon not more than 60 days' written notice to the
Service Agent, by vote of the holders of a majority of the
shares of such Series. Each service agreement will terminate
automatically, as to the relevant Series, in the event of its
assignment (as defined in the Act).
During the fiscal year ended December 31, 1994, $583,166
was charged to the Money Market Series under the Plan, of which
$403,119 was paid to FNBC and its affiliates, $13,461 was paid
for preparing, printing and distributing prospectuses and
operating the Plan, and $166,586 was charged for advertising,
marketing and Servicing the Money Market Series' shares.
During the fiscal year ended December 31, 1994, $334,170 was
charged to the Government Series under the Plan, of which
$317,581 was paid to FNBC and its affiliates, $345 was paid for
preparing, printing and distributing prospectuses and operating
the Plan, and $16,244 was paid for advertising, marketing and
Servicing the Government Series' shares.
REDEMPTION OF FUND SHARES
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "How to Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on
the Account Application or by later written request that the
Fund provide Redemption Checks ("Checks") drawn on the Fund's
account. Checks will be sent only to the registered owner(s)
of the account and only to the address of record. The Account
Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the
order of any person in an amount of $500 or more. When a Check
is presented to the Transfer Agent for payment, the Transfer
Agent, as the investor's agent, will cause the Fund to redeem a
sufficient number of full or fractional shares in the
investor's account to cover the amount of the Check. Dividends
are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors
generally will be subject to the same rules and regulations
that apply to checking accounts, although election of this
Privilege creates only a shareholder-transfer agent
relationship with the Transfer Agent.
If the amount of the Check is greater than the value of
the shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close
an account.
Redemption Commitment. For each Series, the Fund has
committed itself to pay in cash all redemption requests by any
shareholder of record, limited in amount during any 90-day
period to the lesser of $250,000 or 1% of the value of such
Series' net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests
for redemption in excess of such amount, the Board of Trustees
reserves the right to make payments in whole or in part in
securities or other assets of the relevant Series in case of an
emergency or any time a cash distribution would impair the
liquidity of the Series to the detriment of the existing
shareholders. In this event, the securities would be valued in
the same manner as the Series' portfolio is valued. If the
recipient sold such securities, brokerage charges would be
incurred.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any
period when the New York Stock Exchange is closed (other than
customary weekend and holiday closings), (b) when trading in
the markets the Fund ordinarily utilizes is restricted, or when
an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments
or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities
and Exchange Commission by order may permit to protect the
Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "How to Buy Fund Shares."
Amortized Cost Pricing. The valuation of each Series'
portfolio securities is based upon their amortized cost which
does not take into account unrealized capital gains or losses.
This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher
or lower than the price the Fund would receive if it sold the
instrument.
The Board of Trustees has established, as a particular
responsibility within the overall duty of care owed to the
Fund's investors, procedures reasonably designed to stabilize
each Series' price per share as computed for the purpose of
sales and redemptions at $1.00. Such procedures include review
of the Series' portfolio holdings by the Board of Trustees, at
such intervals as it deems appropriate, to determine whether a
Series' net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share
based on amortized cost. In such review, investments for which
market quotations are readily available will be valued at the
most recent bid price or yield equivalent for such securities
or for securities of comparable maturity, quality and type, as
obtained from one or more of the major market makers for the
securities to be valued. Other investments and assets will be
valued at fair value as determined in good faith by the Board
of Trustees.
The extent of any deviation between a Series' net asset
value based upon available market quotations or market
equivalents and $1.00 per share based on amortized cost will be
examined by the Board of Trustees. If such deviation exceeds
1/2 of 1%, the Board of Trustees promptly will consider what
action, if any, will be initiated. In the event the Board of
Trustees determines that a deviation exists which may result in
material dilution or other unfair results to investors or
existing shareholders, it has agreed to take such corrective
action as it deems necessary and appropriate, including:
selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio
maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or
establishing a net asset value per share by using available
market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "Dividends, Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Internal Revenue Code
of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "Yield Information."
For the seven-day period ended December 31, 1994, the
Money Market Series' yield was 4.53%, and its effective yield
was 4.63%. The Government Series' yield for such period was
4.61%, and its effective yield was 4.72%. Yield is computed in
accordance with a standardized method which involves
determining the net change in the value of a hypothetical
pre-existing Series account having a balance of one share at
the beginning of a seven calendar day period for which yield is
to be quoted, dividing the net change by the value of the
account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying
the base period return by 365/7). The net change in the value
of the account reflects the value of additional shares
purchased with dividends declared on the original share and any
such additional shares and fees that may be charged to
shareholder accounts, in proportion to the length of the base
period and the Series' average account size, but does not
include realized gains and losses or unrealized appreciation
and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising
that sum to a power equal to 365 divided by 7, and subtracting
1 from the result.
Yields will fluctuate and are not necessarily
representative of future results. Each investor should
remember that yield is a function of the type and quality of
the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in the Fund is not
guaranteed. See "Determination of Net Asset Value" for a
discussion of the manner in which each Series' price per share
is determined.
From time to time, advertising for the Fund may describe
the costs of a college education at public or private
institutions; how such costs may increase over time, based on
an assumed rate of growth; and how investments in the Series
can be used to help pay for such costs. Advertisements for the
Fund also may refer to how an investment in the Fund may be
used as a savings vehicle for various purposes such as a down
payment on the purchase price of a home or to fund retirement
or medical costs. Advertisements for the Fund also may refer
to comparisons of the Fund's performance with historical rates
of inflation.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly
from the issuer or an underwriter or a market maker for the
securities. Ordinarily, no brokerage commissions are paid by
the Fund for such purchases. Purchases from underwriters of
portfolio securities include a concession paid by the issuer to
the underwriter and the purchase price paid to, and sales price
received from, market makers for the securities may reflect the
spread between the bid and asked price. No brokerage
commissions have been paid by either Series to date.
Transactions are allocated to various dealers by the
Fund's investment personnel in their best judgment. The
primary consideration is prompt and effective execution of
orders at the most favorable price. Subject to that primary
consideration, dealers may be selected for research,
statistical or other services to enable the Manager to
supplement its own research and analysis with the views and
information of other securities firms and may be selected based
upon their sales of Fund shares.
Research services furnished by brokers through which the
Fund effects securities transactions may be used by the Manager
in advising other funds or accounts it may advise and,
conversely, research services furnished to the Manager by
brokers in connection with other funds or accounts the Manager
may advise may be used by the Manager in advising the Fund.
Although it is not possible to place a dollar value on these
services, it is the opinion of the Manager that the receipt and
study of such services should not reduce its overall research
expenses.
INFORMATION ABOUT THE FUND
The following information supplements and should be read
in conjunction with the section in the Fund's Prospectus
entitled "General Information."
Each Series share has one vote and, when issued and paid
for in accordance with the terms of the offering, is fully paid
and non-assessable. Series' shares have no preemptive,
subscription or conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements
to all its shareholders and sends statements concerning
shareholder accounts monthly.
On March 15, 1989, the Fund's name was changed from First
Lakeshore Money Market Fund to First Prairie Money Market Fund.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan, 7 Hanover Square, New York,
New York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.
<PAGE>
APPENDIX
Description of the two highest commercial paper, bond
and other short- and long-term rating categories assigned by
Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's"), Fitch Investors Service, Inc.
("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc.
("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree
of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming
safety characteristics are denoted with a plus sign (+)
designation. Capacity for timely payment on issues with an A-2
designation is strong. However, the relative degree of safety
is not as high as for issues designated A-1.
The rating Prime-1 (P-1) is the highest commercial
paper rating assigned by Moody's. Issuers of P-1 paper must
have a superior capacity for repayment of short-term promissory
obligations and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and
high internal cash generation, and well established access to a
range of financial markets and assured sources of alternate
liquidity. Issues (or related supporting institutions) rated
Prime-2 (P-2) have a strong capacity for repayment of senior
short-term promissory obligations. This ordinarily will be
evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected
by external conditions. Ample alternate liquidity is
maintained.
The rating Fitch-1 (Highest Grade) is the highest
commercial paper rating assigned by Fitch. Paper rated Fitch-1
is regarded as having the strongest degree of assurance for
timely payment. The rating Fitch-2 (Very Good Grade) is the
second highest commercial paper rating assigned by Fitch which
reflects an assurance of timely payment only slightly less in
decree than the strongest issues.
The rating Duff-1 is the highest commercial paper
rating assigned by Duff. Paper rated Duff-1 is regarded as
having very high certainty of timely payment with excellent
liquidity factors which are supported by ample asset
protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good
access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the
obligation is supported by a very strong capacity for timely
repayment. Those obligations rated A1+ are supported by the
highest capacity for timely repayment. Obligations rated A2
are supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
The rating TBW-1 is the highest short-term obligation
rating assigned by BankWatch. Obligations rated TBW-1 are
regarded as having the strongest capacity for timely repayment.
Obligations rated TBW-2 are supported by a strong capacity for
timely repayment, although the degree of safety is not as high
as for issues rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the
highest grade obligations and possess an extremely strong
capacity to pay principal and interest. Bonds rated AA by S&P
are judged by S&P to have a very strong capacity to pay
principal and interest, and in the majority of instances,
differ only in small degree from issues rated AAA. The rating
AA may be modified by the addition of a plus or minus sign to
show relative standing within the rating category.
Bonds rated Aaa are judged by Moody's to be of the
best quality. Bonds rated Aa by Moody's are judged by Moody's
to be of high quality by all standards. Together with the Aaa
group, they comprise what are generally known as high-grade
bonds. Bonds rated Aa are rated lower than Aaa bonds because
margins of protection may not be as large or fluctuations of
protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger. Moody's applies the numerical modifiers 1, 2
and 3 in the Aa rating category. The modifier 1 indicates a
ranking for the security in the higher end of this rating
category, the modifier 2 indicates a mid-range ranking and the
modifier 3 indicates a ranking in the lower end of the rating
category.
Bonds rated AAA by Fitch are judged by Fitch to be
strictly high-grade, broadly marketable and suitable for
investment by trustees and fiduciary institutions and liable to
but slight market fluctuation other than through changes in the
money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements,
with such stability of applicable earnings that safety is
beyond reasonable question whatever changes occur in
conditions. Bonds rated AA by Fitch are judged by Fitch to be
of safety virtually beyond question and are readily salable,
whose merits are not unlike those of the AAA class, but whose
margin of safety is less strikingly broad. The issue may be
the obligation of a small company, strongly secured but
influenced as to rating by the lesser financial power of the
enterprise and more local type of market.
Bonds rated AAA by Duff are considered to be of the
highest credit quality. The risk factors are negligible, being
only slightly more than U.S. Treasury debt. Bonds rated AA are
considered by Duff to be of high credit quality with strong
protection factors. Risk is modest but may vary slightly from
time to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest
expectation of investment risk. Capacity for timely repayment
of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.
Obligations rated AA by IBCA have a very low expectation of
investment risk. Capacity for timely repayment of principal and
interest is substantial. Adverse changes in business, economic
or financial conditions may increase investment risk, albeit
not very significantly.
IBCA also assigns a rating to certain international
and U.S. banks. An IBCA bank rating represents IBCA's current
assessment of the strength of the bank and whether such bank
would receive support should it experience difficulties. In
its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In
addition, IBCA assigns banks long- and short-term ratings as
used in the corporate ratings discussed above. Legal Ratings,
which range in gradations from 1 through 5, address the
question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties,
and such ratings are considered by IBCA to be a prime factor in
its assessment of credit risk. Individual Ratings, which range
in gradations from A through E, represent IBCA's assessment of
a bank's economic merits and address the question of how the
bank would be viewed if it were entirely independent and could
not rely on support from state authorities or its owners.
In addition to its ratings of short-term obligations,
BankWatch assigns a rating to each issuer it rates, in
gradations of A through E. BankWatch examines all segments of
the organization, including, where applicable, the holding
company, member banks or associations, and other subsidiaries.
In those instances where financial disclosure is incomplete or
untimely, a qualified rating (QR) is assigned to the
institution. BankWatch also assigns, in the case of foreign
banks, a country rating which represents an assessment of the
overall political and economic stability of the country in
which the bank is domiciled.
<PAGE>
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--8.4% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
Canadian Imperial Bank of Commerce (Yankee)
5.96%, 1/19/1995.................................... $ 5,000,000 $ 5,000,000
Norichukin Bank (Yankee)
5.80%, 1/3/1995..................................... 5,000,000 5,000,016
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (cost $10,000,016).. $ 10,000,016
=============
COMMERCIAL PAPER--12.4%
AIG Funding, Inc.
6.06%, 2/22/1995.................................... $ 5,000,000 $ 4,956,667
Barclays Bank of Canada
6.07%, 2/22/1995.................................... 5,000,000 4,956,594
Receivables Capital Corp.
6.18%, 2/10/1995.................................... 5,000,000 4,965,944
--------------
TOTAL COMMERCIAL PAPER
(cost $14,879,205).................................. $ 14,879,205
=============
CORPORATE NOTE--4.2%
Merrill Lynch & Co. Inc.
5.79%, 6/7/1995 (a)
(cost $5,000,000)................................... $ 5,000,000 $ 5,000,000
=============
BANKERS ACCEPTANCE--4.1%
Fuji Bank, Ltd. (Yankee)
5.86%, 2/22/1995
(cost $4,958,328)..................................... $ 5,000,000 $ 4,958,328
=============
U.S. GOVERNMENT AGENCIES--37.2%
Federal Home Loan Banks
Floating Rate Notes
4.80%, 7/6/1995 (a).................................. $ 25,000,000 $ 25,000,000
Small Business Administration
Pool Certificates (a)
6.81%, 9/25/1995..................................... 26,559 26,559
5.63%, 4/25/1996..................................... 33,884 33,884
6.44.%, 5/25/1999....................................... 93,890 93,890
7.04%, 3/25/2000......................................... 358,109 358,109
7.06%, 1/25/2001...................................... 535,131 535,131
6.87%, 12/25/2001.................................... 308,831 308,831
6.94%, 9/25/2003....................................... 39,236 39,236
7.26%, 9/25/2003....................................... 323,904 323,904
4.95%, 10/25/2005.................................... 1,416,170 1,416,170
6.23%, 1/25/2007.................................... 245,701 245,701
6.07%, 4/25/2007.................................... 1,151,023 1,151,023
7.18%, 6/25/2008..................................... 749,579 749,579
6.97%, 12/25/2008.................................... 307,420 307,420
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PRINCIPAL
U.S. GOVERNMENT AGENCIES (CONTINUED) AMOUNT VALUE
-------------- --------------
<S> <C> <C>
Small Business Administration (continued)
Pool Certificates (a) (continued)
7.06%, 1/25/2009...................................... $ 889,180 $ 889,180
6.62%, 4/25/2013...................................... 2,089,913 2,089,913
6.48%, 5/25/2013...................................... 1,629,428 1,629,428
6.96%, 7/25/2013...................................... 102,632 102,632
6.49%, 8/25/2013...................................... 1,674,219 1,674,219
6.37%, 12/25/2013..................................... 258,254 258,254
7.09%, 12/25/2013..................................... 2,000,657 2,000,657
7.20%, 1/25/2014...................................... 998,562 998,562
6.95%, 2/25/2014...................................... 386,405 386,405
7.09%, 2/25/2014...................................... 1,398,542 1,398,542
6.03%, 5/25/2014...................................... 933,741 933,741
7.37%, 7/25/2014...................................... 1,439,470 1,439,470
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $44,390,440)............................................ $ 44,390,440
=============
REPURCHASE AGREEMENTS--32.7%
National Westminster Bank USA
5.40%, dated 12/30/94 due 1/3/95 in the amount of $20,012,000
(fully collateralized by $22,480,000 U.S. Treasury Notes
4.75%, due 10/31/98, value $20,353,190)..................... $ 20,000,000 $ 20,000,000
Sanwa Bank Ltd.
5.00%, dated 12/30/94 due 1/3/95 in the amount of $19,010,556
(fully collateralized by $19,756,000 U.S. Treasury Notes
6.50%, due 5/15/97, value $19,369,660)........................... 19,000,000 19,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(cost $39,000,000)................................................. $ 39,000,000
=============
TOTAL INVESTMENTS
(cost $118,227,989)............................................ 99.0% $118,227,989
====== =============
CASH AND RECEIVABLES (NET)......................................... 1.0% $ 1,172,029
====== =============
NET ASSETS ................................................... 100.0% $119,400,018
====== =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS--64.0% PURCHASE AMOUNT VALUE
------------ -------------- --------------
<S> <C> <C> <C>
1/5/1995................................................... 4.92% $ 5,000,000 $ 4,997,305
2/9/1995................................................... 4.88 25,000,000 24,869,080
3/2/1995................................................... 5.51 25,000,000 24,773,750
3/16/1995.................................................. 5.54 20,000,000 19,775,944
--------------
TOTAL U.S. TREASURY BILLS
(cost $74,416,079)......................................... $ 74,416,079
=============
U.S. GOVERNMENT AGENCIES--8.1%
Small Business Administration
Pool Certificates (a)
6/25/2013.................................................. 6.37% $ 865,303 $ 865,303
9/25/2014.................................................. 7.00 896,451 896,451
9/25/2016.................................................. 5.86 7,612,193 7,637,083
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $9,398,837).......................................... $ 9,398,837
=============
REPURCHASE AGREEMENTS--35.2%
Barclays De Zoette Wedd
dated 12/30/94, due 1/3/95 in the amount of
$20,012,222 (fully collateralized by
$20,315,000 U.S. Treasury Bill due 2/9/95,
value $20,203,945)......................................... 5.50% $ 20,000,000 $ 20,000,000
National Westminster Bank USA
dated 12/30/94, due 1/3/95 in the amount of
$21,012,600 (fully collateralized by
$22,940,000 U.S. Treasury Notes 5.125%,
due 12/31/98, value $21,420,225)........................... 5.40 21,000,000 21,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(cost $41,000,000)......................................... $ 41,000,000
=============
TOTAL INVESTMENTS
(cost $124,814,916).............................. 107.3% $124,814,916
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES............... (7.3%) $ (8,462,260)
====== =============
NET ASSETS........................................... 100.0% $116,352,656
====== =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
</TABLE>
<TABLE>
<CAPTION>
See notes to financial statements.
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
MONEY MARKET GOVERNMENT
SERIES SERIES
-------------- --------------
ASSETS:
<S> <C> <C>
Investments in securities, at value (including repurchase agreements
of $39,000,000 and $41,000,000 for the Money Market Series and
the Government Series, respectively)_Note 2(a,b)...................... $118,227,989 $124,814,916
Cash.................................................................... 310,439 ____
Interest receivable..................................................... 576,909 111,786
Receivable for investment securities sold............................... 493,453 363,211
Prepaid expenses........................................................ 46,479 10,158
-------------- --------------
119,655,269 125,300,071
-------------- --------------
LIABILITIES:
Due to The First National Bank of Chicago............................... 82,023 62,129
Due to The Dreyfus Corporation.......................................... 78,173 62,950
Due to Custodian........................................................ ____ 8,782,836
Accrued expenses........................................................ 95,055 39,500
-------------- --------------
255,251 8,947,415
-------------- --------------
NET ASSETS ..................................................... $119,400,018 $116,352,656
============== =============
REPRESENTED BY:
Paid-in capital......................................................... $120,709,849 $117,334,182
Accumulated net realized (loss) on investments.......................... (1,309,831) (981,526)
-------------- --------------
NET ASSETS at value applicable to 119,423,849 and 116,401,128 shares
outstanding (unlimited number of $.01 par value shares of
Beneficial Interest authorized)......................................... $119,400,018 $116,352,656
============== =============
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($119,400,018/119,423,849 shares)..................................... $1.00
======
Government Series
($116,352,656/116,401,128 shares)..................................... $1.00
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF OPERATIONS DECEMBER 31, 1994
MONEY MARKET GOVERNMENT
SERIES SERIES
-------------- --------------
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $7,085,656 $5,775,870
-------------- --------------
EXPENSES--Note 2(c):
Management fee_Note 3(a).............................................. $ 859,905 $ 692,452
Shareholder servicing costs_Note 3(b)................................. 583,166 334,170
Professional fees..................................................... 53,306 20,565
Custodian fees........................................................ 40,709 21,630
Prospectus and shareholders' reports_Note 3(b)........................ 22,768 ____
Registration fees..................................................... 8,504 13,361
Trustees' fees and expenses_Note 3(c)................................. 8,325 4,396
Miscellaneous......................................................... 17,023 24,237
-------------- --------------
1,593,706 1,110,811
Less_reduction in management fee due to
undertaking_Note 3(a)............................................. ____ 29,785
-------------- --------------
TOTAL EXPENSES.................................................. 1,593,706 1,081,026
-------------- --------------
INVESTMENT INCOME--NET...................................................... 5,491,950 4,694,844
NET REALIZED (LOSS) ON INVESTMENTS--Note 2(b)............................... (1,309,831) (961,178)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,182,119 $3,733,666
============== =============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
MONEY MARKET SERIES GOVERNMENT SERIES
------------------------------ ---------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------ --------------------------------
1993 1994 1993 1994
--------------- -------------- ---------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Investment income_net.................. $ 5,585,126 $ 5,491,950 $ 11,900,346 $ 4,694,844
Net realized gain (loss) on investments 23,361 (1,309,831) (13,557) (961,178)
--------------- -------------- ---------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ 5,608,487 4,182,119 11,886,789 3,733,666
--------------- -------------- ---------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net.................. (5,585,126) (5,491,950) (11,900,346) (4,694,844)
Net realized gain on investments....... (4,319) (23,361) ___ ___
--------------- -------------- ---------------- --------------
TOTAL DIVIDENDS...................... (5,589,445) (5,515,311) (11,900,346) (4,694,844)
--------------- -------------- ---------------- --------------
BENEFICIAL INTEREST TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold.......... 1,739,129,690 1,724,346,455 1,491,641,119 677,021,399
Dividends reinvested................... 2,244,715 2,559,069 564,832 1,310,332
Cost of shares redeemed................ (1,839,635,459)(1,770,081,791) (1,886,311,644) (716,564,214)
--------------- -------------- ---------------- --------------
(DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS. (98,261,054) (43,176,267) (394,105,693) (38,232,483)
--------------- -------------- ---------------- --------------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER--Note 3(d).............. --__ 1,286,000 ___ 933,054
--------------- -------------- ---------------- --------------
TOTAL (DECREASE) IN NET ASSETS. (98,242,012) (43,223,459) (394,119,250) (38,260,607)
NET ASSETS:
Beginning of year...................... 260,865,489 162,623,477 548,732,513 154,613,263
--------------- -------------- ---------------- --------------
End of year............................ $ 162,623,477 $ 119,400,018 $ 154,613,263 $ 116,352,656
=============== ============== ================ ================
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
---------------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0001
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net........................ .0734 .0543 .0313 .0274 .0355
Net realized gain (loss) on investments...... -_ -_ -_ .0001 (.0109)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS........... .0734 .0543 .0313 .0275 .0246
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net......... (.0734) (.0543) (.0313) (.0274) (.0355)
Dividends from net realized gain on investments -_ -_ -_ -_ (.0002)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS........................ (.0734) (.0543) (.0313) (.0274) (.0357)
------- ------- ------- ------- -------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER............................. -_ -_ -_ -_ .0108
------- ------- ------- ------- -------
Net asset value, end of year................. $1.0000 $1.0000 $1.0000 $1.0001 $ .9998
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 7.59% 5.57% 3.18% 2.77% 3.63%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .96% .97% .98% .94% 1.02%
Ratio of net investment income to average
net assets................................. 7.33% 5.42% 3.17% 2.73% 3.51%
Decrease reflected in above expense ratios due
to expense reimbursements.................. -_ -_ -_ .05% -_
Net Assets, end of year (000's Omitted)...... $414,258 $456,791 $260,865 $162,623 $119,400
- -------------------------------
* Had the Series not had a capital contribution by the advisor during
the period, the total return would have been 2.61%.
</TABLE>
<TABLE>
<CAPTION>
See notes to financial statements.
FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $ .9999
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net........................ .0715 .0498 .0283 .0249 .0379
Net realized (loss) on investments........... -_ -_ -_ (.0001) (.0083)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS........... .0715 .0498 .0283 .0248 .0296
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net......... (.0715) (.0498) (.0283) (.0249) (.0379)
Dividends from net realized gain
on investments............................. -_ -_ -_ -_ -_
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS........................ (.0715) (.0498) (.0283) (.0249) (.0379)
------- ------- ------- ------- -------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER............................. -_ -_ -_ -_ .0080
------- ------- ------- ------- -------
Net asset value, end of year................. $1.0000 $1.0000 $1.0000 $ .9999 $ .9996
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 7.39% 5.10% 2.87% 2.52% 3.86%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .93% .90% .91% .74% .86%
Ratio of net investment income to average
net assets................................. 7.09% 4.97% 2.87% 2.48% 3.73%
Decrease reflected in above expense ratios due
to expense reimbursements.................. -_ -_ -_ .14% .02%
Net Assets, end of year (000's Omitted)...... $777,257 $990,897 $548,733 $154,613 $116,353
- -------------------------------
* Had the Series not had a capital contribution by the advisor during
the period, the total return would have been 2.83%.
</TABLE>
See notes to financial statements.
FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company and operates as a series company issuing two classes of
Beneficial Interest: the Money Market Series and the Government
Series. The Fund accounts separately for the assets,
liabilities and operations of each series. The First National
Bank of Chicago ("Manager") serves as the Fund's investment
adviser. The Dreyfus Corporation ("Dreyfus") provides certain
administrative services to the Fund_see Note 3(a). Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold without a sales load. Effective August
24, 1994, Dreyfus became a direct subsidiary of Mellon Bank,
N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The
Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of
which is Boston Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset
value per share of $1.00 for each series; the Fund has adopted
certain investment, portfolio valuation and dividend and
distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments are valued at
amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain
and loss from securities transactions are recorded on the
identified cost basis. Interest income is recognized on the
accrual basis. Cost of investments represents amortized cost.
The Fund may enter into repurchase agreements with
financial institutions, deemed to be creditworthy by the Fund's
Adviser, subject to the seller's agreement to repurchase and
the Fund's agreement to resell such securities at a mutually
agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase
price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase
price plus accrued interest, the Fund will require the seller
to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller
defaults on its repurchase obligation, the Fund maintains the
right to sell the underlying securities at market value and
may claim any resulting loss against the seller.
(C) EXPENSES: Expenses directly attributable to each series
are charged to that series' operations; expenses which are
applicable to both series are allocated between them on a pro
rata basis.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the
Fund, with respect to both series, to declare dividends daily
from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, with respect to both
series, are normally declared and paid annually, but each
series may make distributions on a more frequent basis to
comply with the distribution requirements of the
FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Internal Revenue Code. However, to the extent that net realized
capital gain of either series can be reduced by capital loss
carryovers of that series, such gain will not be distributed.
(E) FEDERAL INCOME TAXES: It is the policy of each series to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income
and excise taxes.
The Money Market Series has an unused capital loss
carryover of approximately $1,302,000 available for Federal
income tax purposes to be applied against future net securities
profits, if any, realized subsequent to December 31, 1994. The
carryover does not include net realized securities losses from
November 1, 1994 through December 31, 1994 which are treated,
for Federal income tax purposes, as arising in 1995. If not
applied, the carryover expires in 2002.
The Government Series has an unused capital loss carryover
of approximately $980,000 available for Federal income tax
purposes to be applied against future net securities profits,
if any, realized subsequent to December 31, 1994. The carryover
does not include net realized securities losses from November
1, 1994 through December 31, 1994 which are treated for
Federal income tax purposes as arising in 1995. If not applied,
$3,000 of the carryover expires in 2000 and $977,000 expires in
2002.
At December 31, 1994, the cost of investments of each
series for Federal income tax purposes was substantially the
same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 3--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee for each series is computed at the
annual rate of .55 of 1% of the average daily value of the net
assets of each series and is payable monthly. The agreement
further provides that if in any full year the aggregate
expenses of either series, excluding interest on borrowings,
taxes, brokerage, and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the
Fund, that series may deduct from the payments to be made to
the Manager, or the Manager will bear such excess to the extent
required by state law. The most stringent state expense
limitation applicable to the Fund presently requires
reimbursement of expenses in any full year that such expenses
(exclusive of distribution expenses and certain expenses as
described above) exceed 2 1/2% of the first $30 million, 2% of
the next $70 million and 1 1/2% of the excess over $100 million
of the average value of either series' net assets in
accordance with California "blue sky" regulations. However, the
Manager has undertaken from November 2, 1994, with respect to
the Government Series, to reduce the management fee paid by
the Series, to the extent that the Series' aggregate expenses
(excluding certain expenses as described above) exceeded .40 of
1% of the Series' average daily net assets. The reduction in
management fee for the year ended December 31, 1994, pursuant
to the undertaking amounted to $29,785.
The Manager has engaged Dreyfus to assist it in providing
certain administrative services for each series pursuant to a
Master Administration Agreement between the Manager and
Dreyfus. Pursuant to its agreement with Dreyfus, the Manager
has agreed to pay Dreyfus for Dreyfus' services.
(B) The Fund has adopted a Service Plan (the "Plan")
pursuant to which each series has agreed to pay costs and
expenses in connection with advertising and marketing shares of
the Fund and payments made to one or more Service Agents
(which may include the Manager, Dreyfus and the Distributor)
based on the value of the Fund's shares owned by clients of the
Service Agent. These advertising and marketing expenses and
fees of the Service Agents may not exceed an annual rate of .25
of 1% of each series' average daily net assets. The Plan also
separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to
exceed the greater of $100,000 or .005 of 1% of each series'
average daily net assets for any full year. For the year ended
December 31, 1994, the Money Market Series and the Government
Series were charged $403,119 and $317,581, respectively,
pursuant to the Plan, substantially all of which was retained
by the Manager and Dreyfus.
(C) Prior to August 24, 1994, certain officers and
trustees of the Fund are "affiliated persons," as defined in
the Act, of the Manager or Dreyfus. Each trustee who is not an
"affiliated person" receives an annual fee of $2,500 and an
attendance fee of $500 per meeting.
(D) During the fiscal year ended December 31, 1994, an
affiliate of the Fund's Adviser purchased securities from the
Fund at an amount in excess of the secruities' fair market
value. The Fund recorded a realized loss on these sales in the
amount of $1,286,000 and $933,054 on the Money Market Series
and the Government Series, respectively, and the Fund recorded
an offsetting capital contribution from the affiliate.
NOTE 4--SUBSEQUENT EVENTS:
As of January 1, 1995, the Fund's investment adviser is First
Chicago Investment Management Company ("FCIMCO"), a newly
formed registered investment adviser and a wholly-owned
subsidiary of The First National Bank of Chicago. Effective
January 17, 1995, the Fund entered into a new administration
agreement with FCIMCO. In addition, effective January 17, 1995,
FCIMCO entered into a master sub-administration agreement with
Concord Holding Corporation ("Concord") pursuant to which
FCIMCO will pay Concord a portion of its administration fee in
consideration of Concord's providing administrative services to
the Fund. The Fund has agreed to pay FCIMCO a monthly advisory
and administration fee at the annual rate of .40% and .15%,
respectively, of the value of the Fund's average daily net
assets.
The Fund entered into a new distribution agreement with
Concord Financial Group, Inc., a wholly-owned subsidiary of
Concord which is effective January 17, 1995.
FIRST PRAIRIE MONEY MARKET FUND REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES FIRST
PRAIRIE MONEY MARKET FUND
We have audited the accompanying statement of assets and
liabilities, including the statements of investments, of First
Prairie Money Market Fund (comprising, respectively, the Money
Market Series and the Government Series) as of December 31,
1994, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial
highlights for each of the years indicated therein. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1994 by
correspondence with the custodian and others. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of each of the respective
series constituting the First Prairie Money Market Fund, at
December 31, 1994, the results of their operations for the year
then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally
accepted accounting principles.
(Ernst & Young LLP Signature
Logo)
New York, New York
February 7, 1995
<PAGE>
FIRST PRAIRIE MONEY MARKET FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information.
Included in Part B of the Registration Statement:
Statement of Investments.
Statement of Assets and Liabilities.
Statement of Operations.
Statement of changes in Net Assets.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent
Auditors.
Item 24. Financial Statements and Exhibits - List
(continued)
(b) Exhibits:
(1)(a) Registrant's Agreement and Declaration of Trust and
Articles of Amendment are incorporated by reference
to Exhibit (1) of Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-1A, filed on
December 30, 1985.
(1)(b) Registrant's Amended and Restated Agreement and
Declaration of Trust dated March 15, 1989 is
incorporated by reference to Exhibit (1)(b) of Post-
Effective Amendment No. 8 to the Registration
Statement on Form N-1A, filed on April 26, 1990.
(2) Registrant's By-Laws are incorporated by reference
to Exhibit (2) of Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-1A, filed on
December 30, 1985.
(5)(a) Investment Advisory Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Service Agreement are incorporated by
reference to Exhibit 6(b) of Pre-Effective Amendment
No. 2 to the Registration Statement on Form N-1A,
filed on December 30, 1985.
(8) The Custody Agreement is incorporated by reference
to Exhibit 8(a) of Post-Effective Amendment No. 8 to
the Registration Statement on Form N-1A, filed on
April 26, 1990.
(9)(a) Administration Agreement.
(9)(b) Master Sub-Administration Agreement.
(10) Opinion and consent of Registrant's counsel is
incorporated by reference to Exhibit (10) of Pre-
Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on December 30, 1985.
(11) Consent of Independent Auditors.
(15) Service Plan is incorporated by reference to Exhibit
(15) of Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A, filed on April
26, 1990.
(16) Yield Computation Schedule is incorporated by
reference to Exhibit (16) of Post-Effective
Amendment No. 11 to the Registration Statement on
Form N-1A, filed on February 26, 1994.
Other Exhibits
____________________
(a) Powers of Attorney are incorporated by
reference to Other Exhibits (a) of Post-
Effective Amendment No. 8 to the
Registration Statement on Form N-1A, filed
on April 26, 1990.
(b) Registrant's Certificate of Secretary is
incorporated by reference to Other
Exhibits (b) of Post-Effective Amendment
No. 6 to the Registration Statement on
Form N-1A, filed on January 16, 1989.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not Applicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record Holders
Title of Class as of April 28, 1995
Money Market Series--Shares
of Beneficial Interest par
value $.01 per share 6,421
Government Series--Shares of
Beneficial Interest par value
$.01 per share 1,174
Item 27. Indemnification
Reference is made to Article EIGHTH of the
Registrant's Agreement and Declaration of Trust
incorporated by reference to Exhibit (1) of Pre
Effective Amendment No. 2 to the Registration
Statement filed under the Securities Act of 1933 on
December 30, 1985. The application of these
provisions is limited by Article 10 of the
Registrant's By-Laws incorporated by reference to
Exhibit (2) of Pre-Effective Amendment No. 2 to the
Registration Statement filed under the Securities
Act of 1933 on December 30, 1985, and the following
undertaking set forth in the rule promulgated by the
Securities and Exchange Commission:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange
Commission such indemnification is against public
policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by the registrant of expenses incurred
or paid by a trustee, officer or controlling person
of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection
with the securities being registered, the registrant
will, unless in the opinion of its counsel the
matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is
against public policy as expressed in such Act and
will be governed by the final adjudication of such
issue.
Reference also is made to the Distribution Agreement,
as revised.
Item 28. Business and Other Connections of Investment Adviser
Registrant is fulfilling the requirement of this
Item 28 to provide a list of the officers and directors of First
Chicago Investment Management Company (the "Investment
Adviser"), together with information as to any other business,
profession, vocation or employment of a substantial nature
engaged in by the Investment Adviser or those of its officers
and directors during the past two years, by incorporating by
reference the information contained in the Form ADV filed with
the SEC pursuant to the Investment Advisers Act of 1940 by the
Investment Adviser (SEC File No. 801-47947).
Item 29. Principal Underwriters
(a) Other investment companies for which
Registrant's principal underwriter (exclusive distributor) acts
as principal underwriter or exclusive distributor:
The Infinity Mutual Funds, Inc.
Pacific Horizon Funds, Inc.
Prairie Funds
Prairie Institutional Funds
Prairie Municipal Bond Fund, Inc.
First Prairie Municipal Money Market Fund
Prairie Intermediate Bond Fund
(b) The information required by this Item
29(b) regarding each director or officer of Concord Financial
Group, Inc. is incorporated by reference to Schedule A of Form
BD filed by Concord Financial Group, Inc. pursuant to the
Securities Exchange Act of 1934 (SEC File No. 8-37601).
Item 30. Location of Accounts and Records
1. First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670
2. Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Registrant hereby undertakes
to call a meeting of shareholders for the
purpose of voting upon the question of removal
of a trustee or trustees when requested in
writing to do so by the holders of at least 10%
of the Registrant's outstanding shares of
beneficial interest and in connection with such
meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies
that it meets all of the requirements for effectiveness of this
Post-Effective Amendment to the Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in this City of New York, and State
of New York, on the 28th day of April, 1995.
FIRST PRAIRIE MONEY
MARKET FUND
BY:/s/ Joseph F. Kissel*
Joseph F. Kissel, President
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, this Amendment to the
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/Joseph F. Kissel* President April 28, 1995
Joseph F. Kissel (Principal
Executive Officer)
/s/ Richard A. Fabietti* Treasurer April 28, 1995
Richard A. Fabietti (Principal Financial
and Accounting
Officer)
/s/ John P. Gould* Trustee April 28, 1995
John P. Gould
/s/ Marilyn McCoy* Trustee April 28, 1995
Marilyn McCoy
/s/ Raymond D. Oddi* Trustee April 28, 1995
Raymond D. Oddi
*By: /s/ Ann E. Bergin April 28, 1995
Ann E. Bergin, As
Attorney-in-fact
</TABLE>
FIRST PRAIRIE MONEY MARKET FUND
Post-Effective Amendment No. 12 to
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
EXHIBITS
<PAGE>
INDEX TO EXHIBITS
Page
(5)(a) Investment Advisory Agreement. . . . . . . . . . .
(6)(a) Distribution Agreement . . . . . . . . . . . . . .
(9)(a) Administration Agreement . . . . . . . . . . . . .
(9)(b) Master Sub-Administration Agreement. . . . . . . .
(11) Consent of Independent Auditors . . . . .
<PAGE>
Exhibit 5(a)
INVESTMENT ADVISORY AGREEMENT
FIRST PRAIRIE MONEY MARKET FUND
125 West 55th Street
New York, New York 10019
January 17, 1995
First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series, if any, named on Schedule 1 hereto, as
such Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which have
been or will be submitted to you, and in such manner and to such
extent as from time to time may be approved by the Fund's Board.
The Fund desires to employ you to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in the Fund's Prospectus and Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise each Series' investments and conduct
a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of such Series' assets. You
will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or
contemplate purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments materially
affecting any Series' portfolio and shall expect you, on your
own initiative, to furnish to the Fund from time to time such
information as you may believe appropriate for this purpose.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you
shall not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or
purport to protect you against any liability to the Fund or a
Series or to its security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the rate set forth opposite each Series'
name on Schedule 1 hereto. Net asset value shall be computed on
such days and at such time or times as described in the Fund's
then-current Prospectus and Statement of Additional Information.
The fee for the period from the date of the commencement of the
public sale of a Series' shares to the end of the month during
which such sale shall have been commenced shall be pro-rated
according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement
before the end of any month, the fee for such part of a month
shall be pro-rated according to the proportion which such period
bears to the full monthly period and shall be payable upon the
date of termination of this Agreement.
For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid
on securities sold short, brokerage fees and commissions, if
any, fees of Board members, Securities and Exchange Commission
fees and state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Series' existence,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing stockholders, costs of stockholders' reports and
meetings, and any extraordinary expenses.
As to each Series, if in any fiscal year the aggregate
expenses of a Series (including fees pursuant to this Agreement,
but excluding interest, taxes, brokerage and, with the prior
written consent of the necessary state securities commissions,
extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over such Series, the Fund may deduct
from the fees to be paid hereunder, or you will bear, such
excess expense to the extent required by state law. Your
obligation pursuant hereto will be limited to the amount of your
fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the
case may be, on a monthly basis.
The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities of
the same issuer is suitable for the investment objectives of two
or more companies or accounts managed by you which have
available funds for investment, the available securities will be
allocated in a manner believed by you to be equitable to each
company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by one
or more Series or the size of the position obtainable for or
disposed of by one or more Series.
In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict
your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render
services of whatever kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940, as amended) of such Series' outstanding voting
securities, provided that in either event its continuance also
is approved by a majority of the Fund's Board members who are
not "interested persons" (as defined in said Act) of any party
to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. As to each Series,
this Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board or by vote of holders of a majority
of such Series' shares or, upon not less than 90 days' notice,
by you. This Agreement also will terminate automatically, as to
the relevant Series, in the event of its assignment (as defined
in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
investment advisory or other agreements with such other
entities. If you cease to act as the Fund's investment adviser,
the Fund agrees that, at your request, the Fund will take all
necessary action to change the name of the Fund to a name not
including "Prairie" in any form or combination of words.
This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
FIRST PRAIRIE MONEY
MARKET FUND
By:__________________________
Accepted:
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:______________________________
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual Fee as a
Percentage of
Average Daily Reapproval Reapproval
Name of Fund or Series Net Assets Date Day
<S> <C> <C> <C>
First Prairie Money Market Fund:
Money Market Series .40% January 17, 1997 January 17
Government Series .40% January 17, 1997 January 17
</TABLE>
<PAGE>
EXHIBIT 6(A)
DISTRIBUTION AGREEMENT
FIRST PRAIRIE MONEY MARKET FUND
125 WEST 55TH STREET
NEW YORK, NEW YORK 10019
January 17, 1995
Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the above-named investment company (the
"Fund") has agreed that you shall be, for the period of this
agreement, the distributor of (a) shares of each series of the
Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes
of this agreement the term "Shares" shall mean the authorized
shares of the relevant Series, if any, and otherwise shall mean
the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares
covered by, and in accordance with, the registration statement
and prospectus then in effect under the Securities Act of 1933,
as amended, and will transmit promptly any orders received by
you for purchase or redemption of Shares to the Transfer and
Dividend Disbursing Agent for the Fund of which the Fund has
notified you in writing.
1.2 You agree to use your best efforts to solicit orders
for the sale of Shares. It is contemplated that you will enter
into sales or servicing agreements with securities dealers,
financial institutions and other industry professionals, such as
investment advisers, accountants and estate planning firms, and
in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance
with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted
pursuant to the Investment Company Act of 1940, as amended, by
the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of
1934, as amended.
1.4 Whenever in their judgment such action is warranted by
market, economic or political conditions, or by abnormal
circumstances of any kind, the Fund's officers may decline to
accept any orders for, or make any sales of, any Shares until
such time as they deem it advisable to accept such orders and to
make such sales and the Fund shall advise you promptly of such
determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished
by the Fund hereunder, and all expenses in connection with the
preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided, however, that
nothing contained herein shall be deemed to require the Fund to
pay any of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents and
to furnish any and all information and otherwise to take all
actions which may be reasonably necessary in the discretion of
the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement, all
other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for use
in connection with the sale of Shares, such information with
respect to the Fund or any relevant Series and the Shares as you
may reasonably request, all of which shall be signed by one or
more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information,
when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual audited reports of the Fund's
books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully prepared
in conformity with the requirements of said Acts and rules and
regulations of the Securities and Exchange Commission there-
under. As used in this agreement the terms "registration state-
ment" and "prospectus" shall mean any registration statement and
prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Fund may but
shall not be obligated to propose from time to time such amend-
ment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of
future developments, may, in the opinion of the Fund's counsel,
be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this agreement
or decline to make offers of the Fund's securities until such
amendments are made. The Fund shall not file any amendment to
any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in the
form furnished to you from time to time, in connection with the
sale of Shares. The Fund agrees to indemnify, defend and hold
you, your several officers and directors, and any person who
controls you within the meaning of Section 15 of the Securities
Act of 1933, as amended, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which you, your officers and directors, or any such con-
trolling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in either any registration statement or any prospectus or
necessary to make the statements in either thereof not
misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund, its
several officers and Board members, and any person who controls
the Fund within the meaning of Section 15 of the Securities Act
of 1933, as amended, free and harmless from and against any and
all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting
from such claims or demands, shall arise out of or be based upon
any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration
statement or in the corresponding statements made in the pro-
spectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the
Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within ten days after the summons or
other first legal process shall have been served. You shall
have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or
omission on your part, and in any other event the Fund, its
officers or Board members, or such controlling person shall each
have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which
you may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and to
the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no orders
for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the
provisions of the Securities Act of 1933, as amended, or if and
so long as a current prospectus as required by Section 10 of
said Act, as amended, is not on file with the Securities and
Exchange Commission; provided, however, that nothing contained
in this paragraph 1.11 shall in any way restrict or have an
application to or bearing upon the Fund's obligation to
repurchase any Shares from any shareholder in accordance with
the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement or
prospectus then in effect or for additional information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending the
effectiveness of the registration statement or prospectus
then in effect or the initiation of any proceeding for that
purpose;
(c) of the happening of any event which makes untrue
any statement of a material fact made in the registration
statement or prospectus then in effect or which requires
the making of a change in such registration statement or
prospectus in order to make the statements therein not
misleading; and
(d) of all actions of the Securities and Exchange
Commission with respect to any amendments to any registra-
tion statement or prospectus which may from time to time be
filed with the Securities and Exchange Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you
shall be offered for sale at a price per share (the "offering
price") approximately equal to (a) their net asset value
(determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
The Fund acknowledges that the persons employed by you to
assist in the performance of your duties under this agreement
may not devote their full time to such service and nothing
contained in this agreement shall be deemed to limit or restrict
your or any of your affiliates' right to engage in and devote
time and attention to other businesses or to render services of
whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund by
the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
FIRST PRAIRIE MONEY MARKET FUND
By:_____________________________
Accepted:
CONCORD FINANCIAL GROUP, INC.
By:________________________
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Name of Fund or Series Reapproval Date Reapproval Day
<S> <C> <C>
First Prairie Money Market Fund:
Money Market Series January 17, 1997 January 17
Government Series January 17, 1997 January 17
</TABLE>
<PAGE>
Exhibit 9(a)
ADMINISTRATION AGREEMENT
FIRST PRAIRIE MONEY MARKET FUND
125 West 55th Street
New York, New York 10019
January 17, 1995
First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series, if any, named on Schedule 1 hereto, as
such Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which have
been or will be submitted to you, and in such manner and to such
extent as from time to time may be approved by the Fund's Board.
The Fund desires to employ you to act as its administrator.
In this connection it is understood that from time
to time you will employ or associate with itself such person or
persons as you may believe to be particularly fitted to assist
it in the performance of this Agreement. Such person or persons
may be officers or employees who are employed by both you and
the Fund. The compensation of such person or persons shall be
paid by you and no obligation may be incurred on the Fund's
behalf in any such respect. We have discussed and concur in
your employing on this basis Concord Holding Corporation (the
"Sub-Administrator").
Pursuant to this agreement and subject to the
supervision and control of the Fund's Board, you will assist in
supervising all aspects of the Fund's operations, except
investment management of the Series' portfolios. It is
understood that, pursuant to this Agreement, you shall not act
and shall not be required to act as an investment adviser or
have any authority to supervise the investment or reinvestment
of the cash, securities or other property comprising the Series'
assets or to determine what securities or other property may be
purchased or sold by the Fund.
You will supply office facilities (which may be in
your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to each Series'
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
shares; and generally assist in all aspects of the Fund's
operations.
You shall exercise your best judgment in rendering
the services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that
neither you nor the Sub-Administrator shall be liable hereunder
for any error of judgment or mistake of law or for any loss
suffered by one or more Series, provided that nothing herein
shall be deemed to protect or purport to protect you or the Sub-
Administrator against any liability to the Fund or a Series or
to its security holders to which you would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence
in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties
hereunder, or to which the Sub-Administrator would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties under the agreement
by which you engage it (the "Master Sub-Administration
Agreement"), or by reason of its reckless disregard of its
obligations and duties under such agreement.
In consideration of the services rendered pursuant
to this Agreement, the Fund will pay you on the first business
day of each month a fee at the rate set forth opposite each
Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described in
the Fund's then-current Prospectus and Statement of Additional
Information. The fee for the period from the date of the
commencement of the public sale of a Series' shares to the end
of
the month during which such sale shall have been commenced shall
be pro-rated according to the proportion which such period bears
to the full monthly period, and upon any termination of this
Agreement before the end of any month, the fee for such part of
a
month shall be pro-rated according to the proportion which such
period bears to the full monthly period and shall be payable
upon
the date of termination of this Agreement.
For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement and will pay
all fees of the Sub-Administrator in connection with its duties
in respect of the Series. All other expenses to be incurred in
the operation of the Fund will be borne by the Fund, except to
the extent specifically assumed by you. The expenses to be
borne by the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members,
Securities and Exchange Commission fees and state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of
maintaining the Series' existence, costs attributable to
investor services (including, without limitation, telephone and
personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and corporate
meetings, and any extraordinary expenses.
The Fund understands that, from time to time
hereafter, you may act as administrator to one or more other
investment companies and fiduciary or other managed accounts,
and the Fund has no objection to your so acting. In addition,
it is understood that the persons employed by you to assist in
the performance of your duties hereunder will not devote their
full time to such service and nothing contained herein shall be
deemed to limit or restrict your right or the right of any of
your affiliates to engage in and devote time and attention to
other businesses or to render services of whatever kind or
nature.
Neither you nor the Sub-Administrator shall be
liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters to
which
this Agreement or the Master Sub-Administration Agreement
relates, except, in the case of you, for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part
in the performance of your duties or from reckless disregard by
you of your obligations and duties under this Agreement and, in
the case of the Sub-Administrator, for a loss resulting from
willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless disregard by
it of its obligations and duties under the Master Sub-
Administration Agreement. Any person, even though also your
officer, Board member, partner, employee or agent, who may be or
become an officer, Board member, partner, employee or agent of
the Fund, shall be deemed, when rendering services to the Fund
or acting on any business of the Fund, to be rendering such
services to or acting solely for the Fund and not as your
officer, Board member, partner, employee, or agent or one under
your control or direction even though paid by you.
As to each Series, this Agreement shall continue
until the date set forth opposite such Series' name on Schedule
1 hereto (the "Reapproved Date"), and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940, as amended) of such Series' outstanding voting
securities, provided that in either event its continuance also
is approved by a majority of the Fund's Board members who are
not "interested persons" (as defined in said Act) of any party
to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. As to each Series,
after the Reapproval Date, this Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board or by vote of
holders of a majority of such Series' shares or, upon not less
than 90 days' notice, by you. This Agreement also will
terminate automatically, as to the relevant Series, in the event
of its assignment (as defined in said Act).
The Fund is agreeing to the provisions of this
Agreement that limit the Sub-Administrator's liability and other
provisions relating to the Sub-Administrator so as to induce the
Sub-Administrator to enter into the Master Sub-Administration
Agreement with you and to perform its obligations thereunder.
The Sub-Administrator is expressly made a third party
beneficiary of this Agreement with rights as respects the Fund
to the same extent as if it had been a party hereto.
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
administration or other agreements with such other entities. If
you cease to act as the Fund's administrator, the Fund agrees
that, at your request, the Fund will take all necessary action
to change the name of the Fund to a name not including "Prairie"
in any form or combination of words.
This Agreement has been executed on behalf of the
Fund by the undersigned officer of the Fund in his capacity as
an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
FIRST PRAIRIE MONEY MARKET
FUND
By:_______________________
Accepted:
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual
Fee as a
Percentage of
Average Daily Reapproval Reapproval
Name of Fund or Series Net Assets Date Day
<S> <C> <C> <C>
First Prairie Money Market Fund:
Money Market Series .15% January 17, 1997 January 17
Government Series .15% January 17, 1997 January 17
</TABLE>
<PAGE>
Exhibit 9(b)
MASTER SUB-ADMINISTRATION AGREEMENT
This Master Sub-Administration Agreement is made as of
this 31st day of January 1995 between FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY, a Delaware corporation, with a principal
place of business at Three First National Plaza, Chicago,
Illinois 60670 (herein called the "FCIMCO"), and CONCORD HOLDING
CORPORATION, a Delaware corporation with a principal place of
business at 125 West 55th Street New York, NY 10019 (herein
called "Concord").
WHEREAS, FCIMCO serves as investment adviser and
administrator to the Prairie Funds, Prairie Institutional Funds,
Prairie Intermediate Bond Fund, Prairie Municipal Bond Fund,
First Prairie Money Market Fund, First Prairie Municipal Money
Market Fund and First Prairie Diversified Asset Fund
(individually each a "Fund" and collectively, the "Funds"), each
an open-end, management investment company registered under the
Investment Company Act of 1940, as amended, and consisting of
the investment portfolios set forth on Schedule I hereto, as
such Schedule may be revised from time to time (individually,
each a "Portfolio" and collectively, the "Portfolios"); and
WHEREAS, pursuant to the terms of an administration
agreement between FCIMCO and each Fund (collectively the
"Administration Agreement"), FCIMCO may employ Concord to assist
it in performing its obligations under the Administration
Agreement; and
WHEREAS, each Fund offers for sale shares of
beneficial interest of its Portfolio(s), with or without par
value as may be determined from time to time by each Fund's
Board of Trustees (herein collectively called "Shares"); and
WHEREAS, pursuant to a Distribution Agreement
(collectively the "Distribution Agreement") between each Fund
and Concord Financial Group, Inc. ("CFG"), each Fund has
retained CFG as its distributor to provide for the sale and
distribution of the Shares; and
WHEREAS, FCIMCO desires to employ Concord to assist it
in performing its obligations pursuant to the Administration
Agreement as more fully described herein, and Concord is willing
to render such services under the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing, and
for other good and valuable consideration, the sufficiency and
receipt whereof are hereby acknowledged, the parties hereto
agree as follows:
I. DELIVERY OF DOCUMENTS
FCIMCO has delivered to Concord copies of each of the
following documents and will deliver to it all future amendments
and supplements thereto, if any:
(a) The Funds' Declarations of Trust and all
amendments thereto (each such Declaration of Trust, as presently
in effect and as it shall from time to time be amended (herein
called collectively the "Declaration of Trust");
(b) The by-laws of each Fund, if any (such by-laws as
presently in effect and as they shall from time to time be
amended, herein called the "By-Laws");
(c) Resolutions of the Board of Trustees of each Fund
authorizing the execution and delivery of this Agreement;
(d) Each Fund's most recent Registration Statement
under the Securities Act of 1933, as amended (the "1933 Act"),
and/or the Investment Company Act of 1940, as amended (the "1940
Act"), on Form N-1A, Form N-14 or other applicable form, as
filed with the Securities and Exchange Commission (the
"Commission") relating to the Shares and any amendment thereto;
(e) Notification of registration of each Fund under
the 1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional
information of each Fund with respect to each of the Portfolios
(such prospectuses and statements of additional information, as
presently in effect and as they shall from time to time be
amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
(g) The Administration Agreement.
II. SUB-ADMINISTRATION SERVICES
1. Engagement as Sub-Administrator. FCIMCO hereby
engages Concord to serve as Sub-Administrator for each of the
Portfolios, and Concord hereby accepts such appointment, under
the terms and conditions set forth herein. FCIMCO understands
and agrees that Concord currently acts and will in the future
continue to act as administrator or sub-administrator of various
investment companies which may be unaffiliated with the Funds
and as fiduciary of other managed accounts. In addition, it is
understood that the persons employed by Concord to assist in the
performance of its duties hereunder will not devote their full
time to such services and may in fact devote a substantial
portion of their time in the performance of duties relating to
Concord's provision of services to other investment companies or
fiduciary accounts and nothing herein shall be deemed to limit
or restrict the right of Concord, its affiliates, and their
respective employees to engage in and devote time and attention
to other businesses or to render services of whatever kind or
nature to Concord's other clients.
2. Services and Duties.
(a) As Sub-Administrator, and subject to the
supervision and control of FCIMCO, Concord will provide those
facilities, equipment, statistical and research data, clerical
services, internal compliance services relating to legal matters
(and personnel to carry out such administrative services) as are
specifically described in paragraph (b) of this paragraph 2
below. FCIMCO represents and warrants to Concord that the
Administration Agreement sets forth all of its duties and
obligations to the Funds as administrator and that it has
entered into no other agreements or understandings with the
Funds with respect to the matters set forth therein. Concord
represents that the services to be performed by it pursuant to
this Agreement are all the administrative services necessary to
permit FCIMCO to discharge fully its obligations to each Fund
under the Administration Agreement (collectively the "Necessary
Services"). Concord agrees to amend this Agreement to add any
additional services legally necessary in order for FCIMCO to
perform its obligations under the Administration Agreement, and
such additional services shall be included as Necessary Services
and shall be provided at no additional cost. FCIMCO understands
and agrees that from time to time Concord may develop and/or
provide to third parties services which may be different from,
or in addition to, the Necessary Services. Concord is not
obligated to provide FCIMCO or the Funds with any services which
are not Necessary Services without further agreement as to
services and additional cost. Concord represents that it has
sufficient personnel and experience to perform the services to
be performed by it hereunder, and agrees to perform such
services in accordance with industry standards for mutual fund
administrators.
(b) Concord shall provide the following services
teach Fund and its Portfolios.
(i) ADVERTISING AND SALES LITERATURE SUPPORT
1. Review and approve for all applicable Securities and
Exchange Commission, NASD (defined below) and all
state compliance requirements all advertising and
sales material prepared by the Fund or its
distributor. It is understood and agreed that Concord
shall not be responsible for the truth or accuracy of
any statements contained in material which was not
prepared by Concord.
File all advertising and sales material with the
2. National Association of Securities Dealers, Inc.
(NASD).
3. Maintain and update the Fund's advertising and sales
literature files.
4. Update advertising logs for all Portfolios.
5. Retain final copies of advertising and sales materials
for the Fund's files.
6. Respond to all NASD or other regulator comments and
provide any necessary contact person for interface
with NASD/other regulator.
(ii) FUND OFFICERS
1. Provide officers to the Fund
(iii) FUND COMPLIANCE
1. Maintain files of all Board and shareholder meeting
materials.
2. Prepare quarterly Board meeting responsibility chart.
3. Maintain annual filing calendar and follow up with
responsible parties.
4. Review, as requested, investment adviser's reports to
be submitted to the Board pursuant to applicable Fund
procedures.
5. Monitor compliance by the Fund with various conditions
imposed by exemptive orders relating to multiple
classes of shares.
6. Quarterly review of securities transactions by persons
designated as access persons by the investment adviser
for purposes of determining compliance with Fund's
Code of Ethics.
7. Review monthly Prospectus compliance reports prepared
by the investment adviser.
8. Negotiate D&O/E&O insurance matters and annual
renewals on behalf of the Fund.
9. Monitor fidelity bond coverage for the Fund.
10. Maintain insurance files for the Fund.
11. Review Prospectuses, as prepared by counsel to the
Fund.
12. Review periodic supplements to Prospectuses, as
prepared by counsel to the Fund.
13. Prepare operating manual for the Fund.
14. Prepare Board agendas and Board books.
15. Review material and reports prepared by Fund auditors,
and material prepared by counsel to the Fund which is
submitted to Concord.
(iv) BLUE SKY
1. Register the Shares with appropriate state blue sky
authorities.
2. Work with counsel to the Fund to address comments
during the registration process.
3. Obtain all sales permits required by relevant state
authorities in order to permit the sale of Shares in
the state.
4. Amend and renew sales permits obtained pursuant to
paragraph 2(b)(iv)(3) as may be required from time to
time.
5. Monitor the sale of Shares in individual states on a
daily basis.
6. File all registration statements, Prospectuses, proxy
statements, Rule 24f-2 Notices and other Fund reports
and documents as required by states' law.
7. Maintain Fund blue sky calendars.
8. Respond to all blue sky audit and examination issues.
(v) CORPORATE COUNSEL
1. Provide support for administrative functions described
in paragraph (b)(i) above.
2. Review Fund distribution agreements.
3. Review Fund administration agreements.
4. Review Prospectuses, amendments, and proxy statements
prepared by counsel to the Fund.
5. Provide, as needed, support to blue sky compliance,
i.e., assist in responding to comment letters, on Fund
compliance and as requested by project managers.
6. Maintain files of Prospectuses, Fund contracts, Fund
proxies and other similar Fund documents.
7. Attend Board and Shareholder Meetings, as requested by
the Fund or FCIMCO.
8. Prepare resolutions for Board Meetings.
9. Prepare and run shareholder meetings.
10. Prepare and maintain corporate records of the Fund
(minute book, etc.)
11. Assist in preparing for and complying with any
regulatory examinations of or involving the Fund.
(vi) FUND ACCOUNTING
A. TREASURER
1. Perform the functions of Fund Treasurer.
B. ACCOUNTS PAYABLE FUNCTIONS
2. Review invoices directed to the Fund and authorize
payments as appropriate.
3. Prepare and file form 1099-MISC for Fund expense
payments, including Trustees' fees.
C. OVERSIGHT FUNCTIONS: Oversight of required books and
records for the Fund, as maintained by Bank of New
York (BONY), or its successor, and oversight and
maintenance of any required books and records for the
Fund as required by Rule 31(a)-1 of the 1940 Act which
are not maintained by BONY.
4. Daily review of net asset value and dividend
calculations.
5. Review of daily ledgers and trial balances.
6. Review of monthly closing packages and related
reports.
7. Daily net asset value calculation for all Portfolios.
8. Compliance with Fund and investment adviser policies
on valuing (pricing) all Fund assets.
D. REPORTING FUNCTIONS:
9. Calculate dividends, as required (daily for money
market funds, etc.).
10. Calculate fee-based expenses, such as advisory fees,
administration fees and 12b-1 fees.
11. Monitor expense accruals for adequacy, and make
adjustments as needed.
12. Prepare the following financial reports, as required:
-- Annual report to shareholders
-- Semi-annual report to shareholders
-- Quarterly reports to Board of Trustees
-- Monthly portfolios of investments
13. Prepare or assist in preparation of the following
regulatory filings:
-- Form N-SAR (prepare)
-- Form N-1A (assist)
-- Proxy materials (assist)
14. Prepare IRS Qualification Tests.
-- Income diversification
-- Asset diversification
15. Prepare or oversee the preparation of the following
performance calculations:
-- Total return
-- SEC yield
-- Distribution yield
-- Total return at varying sales charges
16. Respond to surveys from industry publications
including, but not limited to Lipper, Donoghues,
Moringstar, Dalbar, Investment Company Institute,
Standard & Poor's
17. Prepare (or assist Fund auditors in preparing) and
file tax returns, including, but not limited to: Form
1120-RIC, state and local filings, excise tax returns.
18. Identify and track book-tax differences, including,
but not limited to: taxability of dividends, income
by state, income by source (US Treasury, Govt Agency,
etc.), dividends received, deduction information,
Alternative Minimum Tax information.
(VII) OPERATIONS
A. ADMINISTRATION
1. Assist with management/implementation of DDA Sweep.
2. Coordinate use of outside vendors by Fund.
3. Provide a designated project manager for routine
ongoing projects.
4. Coordinate the printing and distribution of
Prospectuses, annual and semi-annual reports.
B. SYSTEMS
5. If specifically agreed between Concord and FCIMCO from
time to time, research and analysis on specific
technical and systems needs of FCIMCO and the Fund.
Such research and analysis may include, feasibility
studies, the creation of systems specifications and
implementation plans, design and testing, and support
in implementation. In addition to the compensation
paid to Concord under paragraph 5 hereof, such support
shall be billed at a rate of $1,500 per day plus
expenses for systems support personnel.
(vii) RELATIONSHIP MANAGER
1. Provide a designated individual to serve as a primary
contact for FCIMCO and the Fund on matters relating to
this Agreement.
(ix) CONSULTATIVE SERVICE
1. Provide limited internal asset gathering consulting
through the relationship manager, as supported by the
project manager.
2. Provide internal sale and educational support relating
to DDA sweep.
(c) In performing its duties herein, Concord warrants
that it will act in conformity with the Declaration of Trust,
By-Laws, and Prospectuses and in accordance with the
instructions and directions of FCIMCO and the Board of Trustees
of each Fund and agrees and warrants that it will conform to and
comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.
(d) Where Concord is required to review or approve
any document, it shall maintain a record of its approval.
3. Subcontractors. It is understood that Concord
may from time to time employ or associate with itself such
person or persons ("Subcontractors") as Concord may believe to
be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such
Subcontractors shall be paid by Concord and that Concord shall
be as fully responsible to the Funds and FCIMCO for the acts and
omissions of any Subcontractor as it is for its own acts and
omissions.
4. Expenses Assumed as Sub-Administrator. Except as
otherwise set forth in this paragraph 4, Concord shall pay all
expenses incurred by it in performing its services and duties as
described herein, including the cost of providing office
facilities, equipment and personnel related to such services and
duties. Other expenses incurred in the operation of each Fund
and the Portfolios (other than those borne by the Funds'
investment adviser or administrator) including taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are
not officers, directors, partner, employees or holders of 5
percent or more of the outstanding voting securities of the
Funds' investment adviser or Concord or any of their affiliates,
Securities and Exchange Commission fees and state blue sky
registration or qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees, fund
accounting agents' fees, fidelity bond and Directors and
officers' errors and omissions insurance premiums, outside
auditing and legal expenses, costs of maintaining corporate
existence, costs attributable to shareholder services, including
without limitation telephone and personnel expenses, costs of
preparing and printing prospectuses for regulatory purposes and
for distribution to existing shareholders, costs of
shareholders' reports and each Fund's meetings and any
extraordinary expenses will be borne by the respective Fund.
The parties hereto further acknowledge and agree that nothing in
this paragraph 4 shall be deemed to impose any obligation on
Concord to pay any expenses not incurred by it or to pay any
expenses incurred by it on behalf of any Fund not directly
associated with Concord's provision of sub-administration
services as described herein.
6. During normal business hours, Concord shall allow
FCIMCO, its auditors, the Funds and the Funds' auditors, and the
Commission, the Comptroller of the Currency and other
appropriate regulators reasonable access to all data, records,
information and personnel relating to Concord's services under
this Agreement.
III. CONFIDENTIALITY
Concord will treat as confidential and as proprietary
information all records and other information of each Fund and
the Portfolios and their prior or present shareholders or those
persons or entities who respond to CFG's inquiries concerning
investment in each Fund, and except as provided below, will not
use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, or the
performance of its responsibilities and duties with regard to
any other Portfolio which may be added to any Fund in the
future. Any other use by Concord of the information and records
referred to above of a Fund may be made only after prior
notification to and approval in writing by that Fund. The
Parties hereto acknowledge and agree that, notwithstanding
anything in the foregoing to the contrary, Concord may release
the information described above, upon prior notice to FCIMCO and
the Fund, if (i) on the written advice of its counsel its
failure to release such information would expose it to civil or
criminal contempt proceedings for failure to release such
information, or (ii) such release is required by law.
IV. LIMITATION OF LIABILITY, SURVIVAL; INDEMNIFICATION
1. Concord shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
FCIMCO or the Funds in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from its reckless disregard of its
obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of
Concord, who may be or become an officer, director, employee or
agent of any Fund, shall be deemed, when rendering services to
the Fund or acting on any business of the Fund (other than
services or business in connection with Concord's duties
hereunder) to be rendering such services to or acting solely for
the Fund and not as an officer, director, partner, employee or
agent or one under the control or direction of Concord even
though paid by Concord.
2. Concord hereby indemnifies FCIMCO against, and
agrees to hold it harmless from any and all damage, loss,
liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and
expenses) in connection with any action, suit or proceeding
brought against FCIMCO or any of its affiliates, incurred or
suffered by FCIMCO or any of its affiliates arising out of or
resulting from Concord's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement
or from its reckless disregard of its obligations and duties
under this Agreement.
3. FCIMCO hereby indemnifies Concord against and
agrees to hold it harmless from any and all damage, loss,
liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and
expenses) (collectively "Damages") in connection with any
action, suit or proceeding brought against Concord and/or any of
its affiliates, incurred or suffered by Concord or any of its
affiliates arising out of or resulting from FCIMCO's willful
misfeasance, bad faith or gross negligence in the performance of
its duties as Investment Adviser and Administrator of any Fund
or from its reckless disregard of its obligations and duties to
any Fund except that FCIMCO shall not indemnify Concord or its
affiliates for Damages arising out of or resulting from
services, obligations and duties undertaken by Concord as
provided in this Agreement.
4. The party seeking indemnification under this
Article IV (the "Indemnified Party") agrees to give prompt
notice to the party from whom indemnity is sought (the
"Indemnifying Party") of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of
which Indemnifying Party may be liable under this Article IV.
The Indemnifying Party may, and at the request of the
Indemnified Party shall, participate in and control the defense
of any such suit, action or proceeding at its own expense. The
Indemnifying Party shall not be liable under this Article IV for
any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be
sought hereunder.
5. The liability and obligations of either party
hereto arising pursuant to the provisions of this ARTICLE IV
shall survive the termination of this Agreement.
V. DURATION AND TERMINATION
1. This Agreement shall become effective as of the
date first above written and shall continue until February 1,
1998. Thereafter, if not terminated, this Agreement shall
continue automatically as to a particular Portfolio for
successive terms of one year. Other than an "assignment" of
this Agreement by Concord to The BISYS Group, Inc. or an
affiliate thereof ("BISYS") this Agreement will automatically
and immediately terminate in the event of its "assignment." As
used in this Agreement, the term "assignment" shall have the
same meaning as such term has in the 1940 Act. If this
Agreement is assigned to BISYS then the term "Concord" shall
refer to BISYS which shall assume all duties, obligations and
responsibilities of Concord hereunder. FCIMCO may terminate
this contract in the event Concord is declared insolvent,
bankrupt, or an assignment is made for the benefit of its
creditors.
2. Anything in this Agreement to the contrary
notwithstanding:
(a) On or after February 1, 1997 FCIMCO may terminate
this Agreement by three months prior written notice to Concord
provided that:
(i) as of the termination date provided in such
notice ("Early Termination Date") all or substantially
all of Concord's duties and responsibilities under
this Agreement will be performed by FCIMCO or another
direct or indirect subsidiary of First Chicago
Corporation and
(ii) as of the Early Termination Date FCIMCO shall pay
Concord a termination fee equal to four times the fee
payable to Concord pursuant to Article II, paragraph 5
of this Agreement for the month which immediately
proceeds the month in which the Early Termination Date
occurs.
(b) On or after February 1, 1998, in addition to the
method of termination by FCIMCO provided in paragraph 2(a)
immediately above, including the requirements of paragraphs
2(a)(i) and 2(a)(ii), either party hereto may terminate this
Agreement by six months prior written to the other party hereto.
(c) FCIMCO shall have the right to terminate this
Agreement upon 45 days written notice if Concord materially
breaches this Agreement. A material breach means the failure to
perform the terms of this Agreement, whether in one act or
omission or a series of acts or omissions, whether or not
related, which (i) results or reasonably could be expected to
result in loss or damage, including expenses, to FCIMCO and/or
the Funds exceeding $50,000 in the aggregate, (ii) results in
the institution of civil or criminal proceedings by the
Commission or other regulator, other than a regular audit or
examination, (iii) constitutes negligence, bad faith or willful
misconduct, (iv) constitutes a violation of any law, rule or
regulation applicable to the Funds, FCIMCO or Concord or any of
its affiliates as to which Concord was required to comply under
the terms of the Agreement where the consequences of such
violation could reasonably be expected to result in the
institution of civil or criminal proceedings by the Commission
or other governmental authorities against the Funds or FCIMCO or
any of its affiliates, or (v) evidences a quantifiable and
material decline in the overall quality of services, provided
that Concord shall have the right to cure the breach set forth
in this clause (v) within 30 days after a written notice setting
forth in detail the nature of the breach, has been delivered to
Concord; provided Concord shall have the right to cure a breach
set forth in this clause (v) if and only if no more than two
other quantifiable and material breaches under this clause (v)
have occurred within the 12 months prior to the delivery of such
notice of the breach of this clause (v). In addition, FCIMCO
shall have the right to terminate this Agreement upon 45 days
written notice if Concord or its affiliates provide or propose
to provide mutual fund administration or distribution services
similar to the Necessary Services to one or more investment
companies whose investment adviser is (i) Stien, Roe and Farnham
or one of its affiliates or (ii) a bank or affiliate thereof,
other than FCIMCO or Bank of America Illinois, having its
principal place of business in the Chicago metropolitan area;
provided, however, that the foregoing termination right shall
not apply in the following two circumstances: (i) Concord or
its affiliates may provide fund administration or distribution
services similar to the Necessary Services to one or more
investment companies whose investment adviser is a bank, or
affiliate thereof, having a principal place of business in the
Chicago metropolitan area (a "Chicago Bank Advised Fund")
provided that such bank or affiliate has, since the date of this
Agreement, merged with, been acquired by, or is otherwise
affiliated with, another bank which acts as investment adviser
to an investment company for which Concord or its affiliates
currently acts as administrator, sub-administrator or
distributor, and (ii) Concord or its affiliates may provide one
or more of the Necessary Services, and may provide fund
accounting and transfer agency services, to Chicago Bank-Advised
Funds and other unaffiliated third parties, provided that
Concord or an affiliate of Concord is not named as administrator
or sub-administrator or any other title which may reflect or
imply that Concord is providing the totality of Necessary
Services to such Chicago Bank-Advised Funds.
3. In the event of the termination of this
Agreement, Concord shall use its best efforts to assist in the
transfer of its responsibilities hereunder to FCIMCO or any
successor administrator or sub-administrator and Concord without
compensation shall remain responsible, which responsibility
shall survive termination of this Agreement, for all regulatory
filings, tax returns and other reports which relate to periods
which concluded prior to the termination.
VI. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated, except by an instrument in writing
signed by both parties hereto.
VII. NOTICES
Notices of any kind to be given to FCIMCO hereunder by
Concord shall be in writing and shall be duly given if mailed,
faxed or delivered to FCIMCO, Three First National Plaza, Suite
0334, Chicago, Illinois 60670, Attention: Marco Hanig or such
other address or to such individual as shall be so specified in
writing by FCIMCO to Concord. Notices of any kind to be given
to Concord hereunder by FCIMCO shall be in writing and shall be
duly given if mailed, faxed or delivered to Concord at 125 West
55th Street, New York New York 10019, Attention: Richard E.
Stierwalt, Chief Executive Officer, or at such other address or
to such individual as Concord shall specify in writing to
FCIMCO.
VIII. MISCELLANEOUS
1. Construction. The captions in this Agreement are
included for convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Article V
hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors and shall be governed by Illinois law; provided,
however, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the
Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:________________________
President
CONCORD HOLDING CORPORATION
By:_________________________
<PAGE>
SCHEDULE I
PRAIRIE FUNDS:
Bond Fund
Equity Income Fund
Growth Fund
Intermediate Municipal Bond Fund
International Bond Fund
International Equity Fund
Managed Assets Fund
Managed Assets Income Fund
Money Market Fund
Municipal Money Market Fund
Special Opportunities Fund
U.S. Government Money Market Fund
Municipal Bond Fund
Intermediate Bond Fund
PRAIRIE INSTITUTIONAL FUNDS:
Cash Management Fund
Municipal Cash Management Fund
Treasury Prime Cash Management Fund
U.S. Government Securities Cash Management Fund
FIRST PRAIRIE:
First Prairie Diversified Assets Fund
First Prairie Money Market Funds
Money Market Series
Government Series
First Prairie Municipal Money
Market Fund
<PAGE>
EXHIBIT (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Condensed Financial Information" in the Prospectus and in the
Supplement to the Prospectus and "Counsel and Independent
Auditors" in the Statement of Additional Information and to the
use of our report dated February 7, 1995, in this Registration
Statement (Form N-1A No. 2-95546) of First Prairie Money Market
Fund.
ERNST & YOUNG LLP
New York, New York
April 28, 1995
